Question 1 Aren plc has prepared the following budget for one of its products, the Gooner, for the forthcoming year: Selling price per unit Variable materials and labour costs per unit Selling and distribution costs per unit Production overheads (75% of which are fixed) Fixed selling and distribution costs £20.50 £7.50 £1.30 £1,600,000 £190,000 160,000 units Production and sales Required: a) Calculate the total budgeted variable costs per unit. b) Calculate the budgeted contribution per unit. c) Calculate the break-even sales volume (in whole units) and break-even sales revenue.
Question 1 Aren plc has prepared the following budget for one of its products, the Gooner, for the forthcoming year: Selling price per unit Variable materials and labour costs per unit Selling and distribution costs per unit Production overheads (75% of which are fixed) Fixed selling and distribution costs £20.50 £7.50 £1.30 £1,600,000 £190,000 160,000 units Production and sales Required: a) Calculate the total budgeted variable costs per unit. b) Calculate the budgeted contribution per unit. c) Calculate the break-even sales volume (in whole units) and break-even sales revenue.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Question 1
Aren plc has prepared the following budget for one of its products, the Gooner, for the
forthcoming year:
Selling price per unit
Variable materials and labour costs per unit
Selling and distribution costs per unit
Production overheads (75% of which are fixed)
Fixed selling and distribution costs
£20.50
£7.50
£1.30
£1,600,000
£190,000
Production and sales
160,000 units
Required:
a) Calculate the total budgeted variable costs per unit.
b) Calculate the budgeted contribution per unit.
c) Calculate the break-even sales volume (in whole units) and break-even sales revenue.
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