Transcribed Image Text: 2.2 Study the information provided below and calculate the following: 2.2.1 Break-even quantity before and after modemisation. 2.2.2 The number of units that must be sold to

Transcribed Image Text: 2.2 Study the information provided below and calculate the following:
2.2.1 Break-even quantity before and after modemisation.
2.2.2 The number of units that must be sold to achieve a profit of R1 500 000 after modernisation.
INFORMATION
One of the projects of Koolaid Limited involves the manufacture of motors for air conditioners. The following information
relates to the period ended 31 May 2020, when the company produced and sold 6 000 motors.
R
Sales
21 000 000
Variable costs
15 000 000
Fixed manufacturing costs
3 000 000
Fixed marketing and administration costs
2 000 000
Management is considering the modernisation of its manufacturing facilities in order to keep up with the changes in
technology. New variable costs are expected to average R2 000 per motor; and the new total fixed costs are anticipated
to be 20% more than prior to the modernisation. Selling price per unit will drop by R300 per unit and sales volume is
expected to increase to 6 500 units.