(a) How far is it true to state that a company’s break-even point occurs where the contribution just equals the fixed costs?

(b) A company’s detailed information of costs and sales has been destroyed because of a computer malfunction. The following data has, however, been gleaned from various sources:

Selling price per unit at all volumes of output is £12.30

Calculate:

(i) The cost of an additional 2,000 units of output;

(ii) The variable costs of 10,000 units of output;

(iii) The fixed element – if any – of each component cost;

(iv) The break-even point.

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Sales volume (units) Costs (£): direct materials direct labour overheads 10,000 30,000 28,000 20,500 12,000 36,000 33,000 24,100