Accounting for decision making

timer Asked: Mar 3rd, 2016

Question description

Calculate the expected operating profit or loss of each proposal. (8)


The following budgeted information for the year ended 30 June 2016 is provided by Lazer Ltd, a manufacturer

of a single product:

Sales (R30 per unit) R2 400 000

Total variable costs (R1 440 000)

Total fixed costs (R800 000)

Operating profit R160 000

The sales manager suggests two proposals to improve the expected operating profit:

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