Hughes Healthfoods makes and sells two types of diet supplement, Slim Quick (SQ) and Healthy Living (HL). It has a single production line on which the two products are made alternately in batches. Some details from next year€™s budget are shown below:

The annual total fixed cost is £2.9 million and the production facility has an absolute maximum capacity of 1.1 million units a year.

Tasks:
1. Calculate the budgeted profit.
2. Determine the break-even point. (Assume the budgeted sales mix is stable throughout the year.)
3. Is it possible for the business to double its profit while maintaining the budgeted sales mix?
4 Is it possible for the business to double its profit if the budgeted sales mix changed to two SQs being sold for every HL?

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Product Unit selling price (£) Unit variable cost (£) Annual sales volume (units) SQ HL 2.00 4.00 5.00 800,000 9.00 200,000