Answer :
### 5.1: Differentiation Between Fixed Costs, Variable Costs, and Total Costs
1. Fixed Costs:
- Definition: Fixed costs are expenses that do not change with the level of goods or services produced by a business. They remain constant regardless of the production volume.
- Example: Rent for factory premises.
2. Variable Costs:
- Definition: Variable costs fluctuate with the level of production output. They increase as production increases and decrease as production decreases.
- Example: Costs of raw materials used in manufacturing products.
3. Total Costs:
- Definition: Total costs are the sum of fixed and variable costs. They represent the total economic cost of production.
- Example: If a company has R 10,000 in fixed costs and R 5,000 in variable costs, the total costs would be R 15,000.
### 5.2: Calculation of % Mark-Up for the Product Sold
- Retail Price: R 499.95
- Cost Price: R 139.95
To calculate the percentage mark-up, use the formula:
[tex]\[ \text{Mark-Up Percentage} = \left( \frac{\text{Retail Price} - \text{Cost Price}}{\text{Cost Price}} \right) \times 100 \][/tex]
Substituting the given values:
[tex]\[ \text{Mark-Up Percentage} = \left( \frac{499.95 - 139.95}{139.95} \right) \times 100 \][/tex]
[tex]\[ \text{Mark-Up Percentage} = \left( \frac{360}{139.95} \right) \times 100 \][/tex]
[tex]\[ \text{Mark-Up Percentage} \approx 257.23\% \][/tex]
### 5.3: Market Share Potential Calculations
1. Total Income of the Total Number of Customers:
- Total Potential Customers: 175
- Average Income per Customer per Month: R 31,500
[tex]\[ \text{Total Income} = \text{Total Potential Customers} \times \text{Average Income per Customer} \][/tex]
[tex]\[ \text{Total Income} = 175 \times 31,500 \][/tex]
[tex]\[ \text{Total Income} = R 5,512,500 \][/tex]
2. Potential Rand Value for the Given Product:
- Percentage of Total Income Spent on Product: 15%
[tex]\[ \text{Potential Rand Value} = \text{Total Income} \times 0.15 \][/tex]
[tex]\[ \text{Potential Rand Value} = 5,512,500 \times 0.15 \][/tex]
[tex]\[ \text{Potential Rand Value} = R 826,875 \][/tex]
3. Expected Market Share in Rand Value:
- Realistic Expected Market Share Percentage: 35%
[tex]\[ \text{Expected Market Share Value} = \text{Potential Rand Value} \times 0.35 \][/tex]
[tex]\[ \text{Expected Market Share Value} = 826,875 \times 0.35 \][/tex]
[tex]\[ \text{Expected Market Share Value} = R 289,406.25 \][/tex]
### 5.4: Five Different Types of Questions for a Good Business Questionnaire
1. Demographic Questions:
- Example: What is your age?
2. Likert Scale Questions:
- Example: On a scale of 1 to 5, how satisfied are you with our product?
3. Open-Ended Questions:
- Example: What features would you like to see in our next product?
4. Multiple Choice Questions:
- Example: Which of the following factors influences your purchasing decision the most? (a) Price (b) Quality (c) Brand (d) Other
5. Rank Order Questions:
- Example: Please rank the following features in order of importance to you: (a) Durability (b) Design (c) Price (d) Warranty
These are essential components of effective market research and can help gather valuable customer insights.
1. Fixed Costs:
- Definition: Fixed costs are expenses that do not change with the level of goods or services produced by a business. They remain constant regardless of the production volume.
- Example: Rent for factory premises.
2. Variable Costs:
- Definition: Variable costs fluctuate with the level of production output. They increase as production increases and decrease as production decreases.
- Example: Costs of raw materials used in manufacturing products.
3. Total Costs:
- Definition: Total costs are the sum of fixed and variable costs. They represent the total economic cost of production.
- Example: If a company has R 10,000 in fixed costs and R 5,000 in variable costs, the total costs would be R 15,000.
### 5.2: Calculation of % Mark-Up for the Product Sold
- Retail Price: R 499.95
- Cost Price: R 139.95
To calculate the percentage mark-up, use the formula:
[tex]\[ \text{Mark-Up Percentage} = \left( \frac{\text{Retail Price} - \text{Cost Price}}{\text{Cost Price}} \right) \times 100 \][/tex]
Substituting the given values:
[tex]\[ \text{Mark-Up Percentage} = \left( \frac{499.95 - 139.95}{139.95} \right) \times 100 \][/tex]
[tex]\[ \text{Mark-Up Percentage} = \left( \frac{360}{139.95} \right) \times 100 \][/tex]
[tex]\[ \text{Mark-Up Percentage} \approx 257.23\% \][/tex]
### 5.3: Market Share Potential Calculations
1. Total Income of the Total Number of Customers:
- Total Potential Customers: 175
- Average Income per Customer per Month: R 31,500
[tex]\[ \text{Total Income} = \text{Total Potential Customers} \times \text{Average Income per Customer} \][/tex]
[tex]\[ \text{Total Income} = 175 \times 31,500 \][/tex]
[tex]\[ \text{Total Income} = R 5,512,500 \][/tex]
2. Potential Rand Value for the Given Product:
- Percentage of Total Income Spent on Product: 15%
[tex]\[ \text{Potential Rand Value} = \text{Total Income} \times 0.15 \][/tex]
[tex]\[ \text{Potential Rand Value} = 5,512,500 \times 0.15 \][/tex]
[tex]\[ \text{Potential Rand Value} = R 826,875 \][/tex]
3. Expected Market Share in Rand Value:
- Realistic Expected Market Share Percentage: 35%
[tex]\[ \text{Expected Market Share Value} = \text{Potential Rand Value} \times 0.35 \][/tex]
[tex]\[ \text{Expected Market Share Value} = 826,875 \times 0.35 \][/tex]
[tex]\[ \text{Expected Market Share Value} = R 289,406.25 \][/tex]
### 5.4: Five Different Types of Questions for a Good Business Questionnaire
1. Demographic Questions:
- Example: What is your age?
2. Likert Scale Questions:
- Example: On a scale of 1 to 5, how satisfied are you with our product?
3. Open-Ended Questions:
- Example: What features would you like to see in our next product?
4. Multiple Choice Questions:
- Example: Which of the following factors influences your purchasing decision the most? (a) Price (b) Quality (c) Brand (d) Other
5. Rank Order Questions:
- Example: Please rank the following features in order of importance to you: (a) Durability (b) Design (c) Price (d) Warranty
These are essential components of effective market research and can help gather valuable customer insights.
