You are the new Management Accountant of Downtown Micro Ltd, which manufactures a specialized microchip that enables any ordinary remote control to operate all kinds of televisions. The variable cost of each chip is £25 and the selling price per chip is £40. Due to the entry of a major American player into the U.K market, this proven to be quite challenging. The company has an annual fixed cost of 82.5 million, management would like you to advice on the break-even output showing your calculations

a). Introduction to break-even-analysis and its uses.in decision making.

b). Discuss how break-even-analysis can be used as decision making tool.

c). How can break-even-analysis be used a budget preparation tool.

Answer rating: 100% (QA)

a Break Even Unit Fixed Cost Contribution Per Unit 250000015 166667 Units Where Contribution Per Unit Selling Price Per Unit Variable Cost Per Unit 40 ... View the full answer