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Business
Accounting
Variable costs    600    300  Contribution    400    200  Fixed costs    200    200  Profit     100    -   Calculate   i) Break-even point for each product ii) Contribution ratio for each product iii) Can you close product B and why? Explain

Variable costs    600    300  Contribution    400    200  Fixed costs    200    200  Profit     100    -   Calculate   i) Break-even point for each product ii) Contribution ratio for each product iii) Can you close product B and why? Explain

FINANCIAL ACCOUNTING
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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Q7. 

c) Contribution statement for komfwe dry cleaning Ltd 
    Product A(ZMW)  Product B(ZMW) 
Unit budgeted   1000    1000 
Sales     1000    500 
Variable costs    600    300 
Contribution    400    200 
Fixed costs    200    200 
Profit     100    -  
Calculate  
i) Break-even point for each product

ii) Contribution ratio for each product

iii) Can you close product B and why? Explain

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