A company produces and sells two products with the following costs: Variable costs (per £ of sales) Fixed costs Product X £0.45 £1,212.000 per period Product Y £0.60 Total sales revenue is currently generated by the two products in the following proportions: Product X Product Y 70% 30% Required: (a) Calculate the break-even sales revenue per period, based on the sales mix assumed above. (b) Prepare a profit volume chart of the above situation for sales revenue up to £4,000,000. Show on the same chart the effect of a change in the sales mix to Product X 509%, Product Y 50%. Clearly lindicate on the chart the break-even point for each situation. (c) Of the fixed costs £455.000 are attributable to Product X. Calculate the sales revenue required on Product X in order to recover the attributable fixed costs and provide a net contribution of £700.000 towards general fixed costs and profit.

A company produces and sells two products with the following costs: Variable costs (per £ of sales) Fixed costs Product X £0.45 £1,212.000 per period Product Y £0.60 Total sales revenue is currently generated by the two products in the following proportions: Product X Product Y 70% 30% Required: (a) Calculate the break-even sales revenue per period, based on the sales mix assumed above. (b) Prepare a profit volume chart of the above situation for sales revenue up to £4,000,000. Show on the same chart the effect of a change in the sales mix to Product X 509%, Product Y 50%. Clearly lindicate on the chart the break-even point for each situation. (c) Of the fixed costs £455.000 are attributable to Product X. Calculate the sales revenue required on Product X in order to recover the attributable fixed costs and provide a net contribution of £700.000 towards general fixed costs and profit.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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