$3\mathrm{.}1$ Priory Pudding Place is a roadside pudding company in Priory St$.$ Ann. The firm specializes in a variety of puddings. Tour operators would stop at the facility to allow visitors to taste a slice of authentic Jamaica cuisine

The firm has provided the following data regarding its operations

i$.$ Direct costs for raw materials amount to $$25$ per unit

ii$.$ Indirect costs for packaging and garnishing is $$5$ per unit

iii. Annual fixed costs consist of

$-$ Administrative expenses $$600,000$

$-$ Selling and distribution $$400,000$

iv$.$ The pudding is sold for $$70$ per unit

Required :

a$.$ State four $(4)$ assumptions of the break even analysis

$$ All costs can be classified into fixed or variable components

$$ Fixed costs remain unchanged over the given time

$$ Variable costs will change directly with output

$$ Revenue will increase directly with output

b$.$ Calculate the break even point in units

Break even in units $=$ Total Fixed cost $/$ Selling price per unit $$ variable cost per unit

$=1,000,000$

$$70-$$$30$

$=25,000$

The firm is planning to produce the pudding in batches as follows

i$.$ The first $15,000$ units to be sold hot off the fire for $$50$ each

ii$.$ The next $15,000$ units will be sold to restaurants for $$70$ each

iii. The remaining $20,000$ units will packaged and sold to the tourist Resorts for $$110$ each

Required :

a$.$ Determine the break even point in units under this arrangement

The firm is planning to diversify its operations by producing three product lines

Cornmeal Pudding, Potato Pudding, and Dukunno, with data as follows

Cornmeal

Pudding Potato

Pudding Dukunno

Selling Price Per Unit $$50$ $$80$ $$40$

Variable Cost Per Unit $$25$ $$40$ $$20$

It is anticipated that the potato pudding will account for $50\%$ of the sales,

Dukunno $30\%$ and cornmeal pudding $20\%.$

Arising from this new arrangement the fixed cost will increase by $$240,000$

Required

b$.$ Determine the number of units of each products that is required

to break even