Ali Limited produces and sells two products. Product A sells for £12 per unit and has a total variable cost of £7.90, while Product B sells 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 costs are £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 in
Ali Limited produces and sells two products. Product A sells for £12 per unit and has a total variable cost of £7.90, while Product B sells 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 costs are £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 in
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Question 4
Ali Limited produces and sells two products.
Product A sells for £12 per unit and has a total variable cost of £7.90, while Product B
sells 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 costs
are £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 in
decision making process.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3fd9bb9b-67ac-463c-bd3e-ea8703757fa5%2Fe50869cb-5073-4000-b2c3-b383178c2271%2F2sono9a_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Question 4
Ali Limited produces and sells two products.
Product A sells for £12 per unit and has a total variable cost of £7.90, while Product B
sells 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 costs
are £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 in
decision making process.
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