XYZ Ltd. produces two products, with the following data:Product X: Selling price Sh. 300, Variable cost Sh. 180Product Y: Selling price Sh. 450, Variable cost Sh. 250Fixed costs: Sh. 2,000,000. Sales mix: 70% Product X, 30% Product Y.(i) Calculate the break - even point in both units and sales value. (5 marks)(ii) Assess the strategic risks of relying heavily on Product X, given its lower contribution margin. (2 marks)

i) Break-Even Summary:Break-Even Units: 13,889 units (9,722 X, 4,167 Y)Break-Even Sales Value: Sh.…

Answered: XYZ Ltd. produces two products, with…

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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urrently, the unit selling price of a product is $410, the unit variable cost is $340, and the total fixed costs are $1,176,000. A proposal is being evaluated to increase the unit selling price to $460. a. Compute the current break-even sales (units).fill in the blank 1 of 1 units b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant.fill in the blank 1 of 1 units
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