Cover up the schedule you constructed as your answer to 44.1

(i) and look instead at the break-even chart constructed as the answer to 44.1

(ii). Answer the following:

(a) What are the total costs at production levels of 

(i) 4,000 units; 

(ii) 7,000 units; 

(iii) 9,000 units;

(iv) 5,500 units?

(b) What is the total revenue at 

(i) 3,000 units; 

(ii) 8,000 units; 

(iii) 5,500 units?

Data from Question 44.1

Hedges Ltd has fixed costs of £8,000. The variable costs are £4 per unit. The revenue (selling price) is £6 per unit. You are required (i) to draft a schedule as follows filling in the columns (a) to (f) for each stage of 1,000 units up to 10,000 units.

(ii) You are also required to draw a break-even chart from the data in this schedule. Draw it carefully to scale on a piece of graph paper. Retain your answer, you will need it for some questions which follow later.

Transcribed Image Text:

No. of units 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 (a) Fixed cost £ (b) Variable cost £ (c) Total cost £ (d) Revenue £f (e) Profit £ (f) Loss £