Musical Ltd produces gift boxes of three CDs with a birthday greeting card. These  boxes sell at 20 per box. This product is in high demand and the company sales during 2010 totalled 1,200,000. In 2010 the costs were as follows: CDs and royalties cost (each) 9.00 Birthday card 0.30 Packaging (per box) 1.25 Direct labour (per box) 0.80 Variable overheads (per box) 0.65 Fixed overheads 96,000  

Using the above information, answer the following questions:

1. Musical Ltd's contribution per unit is:

(a) 8.00.

(b) 12.00

(c) 14.00

(d) 20.00

2. Musical Ltd's break-even point (in boxes) is:

(a) 4,800

(b) 8,000

(c) 12,000

(d) 32,000

3. Musical Ltd's break-even point (in sales revenue) is:

(a) 48,000

(b) 160,000

(c) 240,000

(d) 640,000

4. How many boxes need to be sold to achieve a target profit of l,000,000?

(a) 98,000

(b) 137,000

(c) 120,000

(d) 180,000

5. How many boxes need to be sold to achieve a target profit of 3,200,000?

(a) 1,600,000

(b) 209,800

(c) 160,000

(d) 412,000

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