Hamza Limited produces and sells two products. Product A sells for £14 per unit and has a total variable cost of £9.90, while Product B sells for £19 per unit and has a total variable cost of £13.20. For every 4 units of Product A sold, three of product B are sold. Hamza Limited fixed costs are £141,850. Budgeted sales revenue is £448,500. Required: a) Calculate the Break-Even points in Units. b) Calculate the Margin of Safety in Units. b) Evaluate the relevance of Break-Even Analysis in decision making process.

Hamza Limited produces and sells two products. Product A sells for £14 per unit and has a total variable cost of £9.90, while Product B sells for £19 per unit and has a total variable cost of £13.20. For every 4 units of Product A sold, three of product B are sold. Hamza Limited fixed costs are £141,850. Budgeted sales revenue is £448,500. Required: a) Calculate the Break-Even points in Units. b) Calculate the Margin of Safety in Units. b) Evaluate the relevance of Break-Even Analysis in decision making process.

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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