.1.5 Coffeecup (Pty) Ltd wants to run a promotion during August. During this month breads will be sold at R18 each. This will lead to a monthly sales increase of 20%. Total fixed costs for August is expected to be R4 500 which will include additional advertising costs. Calculate the total expected profit for August.
Coffeecup (Pty) Ltd operates a chain of coffee shops, with each shop making their own breads. The
The following estimates for the new shop are available:
1. Standard price and variable costs:
R per bread
Sales price 20.00
Ingredients (7.00)
Electricity (1.00)
Contribution 12.00
2. Fixed cost per annum:
R
Bread labour 10 000
Shop labour 10 000
Rent of bakery and shop 30 000
Total fixed costs per annum 50 000
3. Budgeted sales per annum are 5 000 breads. Sales occurs evenly throughout the year.
Assume 365 days in a year.
Required
Q.1.5 Coffeecup (Pty) Ltd wants to run a promotion during August. During this month breads will be sold at R18 each. This will lead to a monthly sales increase of 20%. Total fixed costs for August is expected to be R4 500 which will include additional advertising costs. Calculate the total expected profit for August.
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