Question 4Ali Limited produces and sells two products.Product A sells for £12 per unit and has a total variable cost of £7.90, while Product Bsells for £17 per unit and has a total variable cost of £11.20.For every 4 units of Product A sold, three of product B are sold. Ali Limited fixed costsare £131,850. Budgeted sales revenue is £428,500.Required:a)b)b)Calculate the Break-Even points in Units.Calculate the Margin of Safety in Units.Evaluate the relevance of Break-Even Analysis indecision making process.

Lets understand the basics.Break even point is a point at which contribution equal to fixed costs of…

Answered: Ali Limited produces and sells two…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Campbell Corporation sells products for $31 each that have variable costs of $18 per unit. Campbell's annual fixed cost is $295,100. Required Use the per-unit contribution margin approach to determine the break-even point in units and dollars.
Lablanc Inc. sells a product for $60 per unit. The variable cost is $34 per unit, while fixed cost are $108,160. Determine (a) the break-even point in sales unit (b) the break-even point if the selling price weee increases to $66 per unit.
Atlantic Company sells a product with a break-even point of 3,517 sales units. The variable cost is $115 per unit, and fixed costs are $140,680. Determine the: a. Unit sales price b. Break-even point in sales units if the company desires a target profit of $55,440 units
Anna Inc. sells two products as follows: Product A Product B Units sold 3,800 4,750 Selling price per unit $300 $450 Variable costs per unit $120 $270 The company has the following fixed costs: Product A, $613,000, Product B, $1,023,000, and common fixed costs of $372,800. Using the above information answer the following questions. What is the package contribution margin? What is the break-even in packages? How many units of Product A are required to break-even? How many units of Product B are required to break-even?
igelow Inc. sells a product for $1,200 per unit. The variable cost is $816 per unit, while fixed costs are $3,120,000. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $1,232 per unit. a. Break-even point in sales units units b. Break-even point if the selling price were increased to $1,232 per unit
jagdish
Ladder Co. produces and sells only two products, Yang and Yin. 6 units of Yang are sold for every 4 units of Yin. Variable costs as a percentage of sales in pesos are 60% for Yang and 85% for Yin. Total fixed cost is P150,000. Assuming that the total fixed cost of Vader Co. is expected to increase by 30% next period, what amount of Yin sales in pesos would be necessary to breakeven?
Yusuf Company sells a product for $220 per unit. The variable cost is $170 per unit, and fixed costs are $180,000. Determine (a) the break-even point in sales units and (b) the sales units required to achieve a target profit of $56,000.
Kerrigan Ltd makes and sells product A. The current selling price is £11 and the total of variable costs per unit is £6. The fixed costs of production are £350,000 and the company currently sells 75,000 units. Required: (a) Calculate the break-even point (in units and revenues) of product A for Kerrigan Ltd. ] (b) Calculate the profit made on sales of 75,000 units. [] (c) The company will make an advertising campaign costs £10,000 and will improve the product specifications, which will increase the variable cost per unit by £1. This is expected to allow the company to increase the selling price to £13 and the sales is expected to be 80,000 unites. Calculate the new profit figure for the improved product.
Trailblazer Company sells a product for $270 per unit. The variable cost is $110 per unit, and fixed costs are $1,056,000. Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of $190,080. a. Break-even point in sales units fill in the blank 1 units b. Break-even point in sales units if the company desires a target profit of $190,080 fill in the blank 2 units
(a) A company manufactures a single product which has variable cost of £40 per unit. The contribution to sales ratio is 45%. Monthly fixed costs are £198,000. What is the breakeven point in pounds and in units? (b) John makes and sells a product which has a variable cost of £60 and sells for £80 per unit. Budgeted fixed costs are £140,000 and budgeted sales are 16000 units. Determine the sales required to achieve this profit What is the breakeven point and margin of safety? (c) TLF Ltd wishes to sell 28,000 units of its product, which has a variable cost of £30 to make and sell. Fixed costs are £94,000 and required profit is £26,000. Calculate the sales price per unit (d) Apple Ltd makes and sells a single product, for which variable costs are follows:Direct materials $20Direct labour $16Variable production overhead $12…

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS