(e) Product Blue Product Red                                                                   £                                      £ Selling                                                     £12.00                            £24.00 Variable cost                                          £ 4.00                              £ 8.00 Contribution margin                            £ 8.00                               £16.00 Fixed costs apportioned                     £200,000                          £400,000 Budgeted Sales Units                          140,000                             60,000 Required: Calculate the breakeven points, for each product and the company as a whole and comment on your findings.    Discuss the merits and demerits of the cost volume profit analysis (CVP).

Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
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(e) Product Blue Product Red

                                                                  £                                      £

Selling                                                     £12.00                            £24.00

Variable cost                                          £ 4.00                              £ 8.00

Contribution margin                            £ 8.00                               £16.00

Fixed costs apportioned                     £200,000                          £400,000

Budgeted Sales Units                          140,000                             60,000

Required:

Calculate the breakeven points, for each product and the company as a whole and comment on your findings.

 

 Discuss the merits and demerits of the cost volume profit analysis (CVP).

 

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