The variable costs per unit of a company’s single product for the period just ended were:
K
Production 120
Non-production 16
The selling price of the product in the period was K200 per unit and the sales revenue required to break-even was K120,000.
Required:
(a) Calculate for the period just ended:
(i) The contribution/sales ratio; (2 marks)
(ii) The total fixed costs. (2 marks)
(b) In the following period it is expected that fixed costs will totalK39,000.
Required: Calculate the required contribution per unit in the following period for the break-even point to be 500 units. (3 marks)
(2 ) A company makes and sells three products. The budget for the next period is as follows:
Product A B C
K per unit K per unit K per unit
Sales price 12 18 20
Variable cost 3 6 11
Profit 3 3 3
Number of units 30,000 40,000 10,000
Calculate
The Breakeven point in sales value (in Kwacha) for the company (3 Marks)
The breakeven point in sales value (in Kwacha) for each product ( 6 Marks)
The breakeven point in sales units for the company (3 Marks)
The breakeven point in sales units for each product (6 Marks)
What sales revenue will be needed to achieve a target profit of K400,000 for the period. (5 Marks)