2. The marginal costing operating statement of ABC Limited for the year just ended is as...

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2. The marginal costing operating statement of ABC Limited for the year just ended is as follows: Sales (5,000 units at $4 per unit) 20,000 8,000 Variable costs Contribution 12,000 Fixed cost 7,500 Profit 4,500 a) Calculate the break-even point. (2 marks) b) Calculate the margin of safety (in units). (3 marks) c) Calculate the sales level to achieve a target profit of $22,500 (in dollars). (3 marks) d) (3 marks) Calculate the selling price to be charged to earn a profit of $22,500 on sales of 10,000 units. e) (3 marks) The additional sales volume required to meet $5,700 additional fixed promotion expenses to maintain the original profit. f) Critically evaluate the usefulness of Break-even/ Cost-Volume-Profit (6 marks) Analysis? 2. The marginal costing operating statement of ABC Limited for the year just ended is as follows: Sales (5,000 units at $4 per unit) 20,000 8,000 Variable costs Contribution 12,000 Fixed cost 7,500 Profit 4,500 a) Calculate the break-even point. (2 marks) b) Calculate the margin of safety (in units). (3 marks) c) Calculate the sales level to achieve a target profit of $22,500 (in dollars). (3 marks) d) (3 marks) Calculate the selling price to be charged to earn a profit of $22,500 on sales of 10,000 units. e) (3 marks) The additional sales volume required to meet $5,700 additional fixed promotion expenses to maintain the original profit. f) Critically evaluate the usefulness of Break-even/ Cost-Volume-Profit (6 marks) Analysis?

Answer rating: 100% (QA)

a Breakeven point Fixed costsContribution per unit 75004 1875 units b ... View the full answer