Q2. A&D Ltd. is in the manufacturing of wooden products and makes several wooden items. The following values are related to a particular wooden item: Particulars Selling price per unitSAR 1,100Variable cost per unitSAR 400Total fixed costsSAR 500,000Estimated next year’s budgeted sales1,200 units You are required to calculate: BEP in units and BEP in sales SARDegree of operating leverageMargin of safety in unitsMargin of safety in SAR

Break even point is where there is no profit and no loss situation and profit is zero. Sales is…

Answered: Q2. A&D Ltd. is in the manufacturing of…

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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Q2. A&D Ltd. is in the manufacturing of wooden products and makes several wooden items. The following values are related to a particular wooden item:

Particulars
Selling price per unit	SAR 1,100
Variable cost per unit	SAR 400
Total fixed costs	SAR 500,000
Estimated next year’s budgeted sales	1,200 units

You are required to calculate:

BEP in units and BEP in sales SAR
Degree of operating leverage
Margin of safety in units
Margin of safety in SAR

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