a) A company makes a single product. The following is the cost structure:
£ Selling price per unit 150 Direct material 40 Direct labour cost per unit 35 Variable overhead cost per unit 30 Total fixed costs 850,000 ======= Budgeted production and sales – 50,000 units Maximum possible production – 65,000 units


TASKS

a) i Calculate the budgeted profit.

ii Calculate the break-even point in units.

iii Calculate the profit if an extra £100,000 was spent on marketing and 60,000 units are made and sold. 

Answer rating: 100% (QA)

1 Profit Selling price per unit Direct material Direct labour cost per unit Variable overhead cost ... View the full answer