Assume that you are planning to sell badges at the forthcoming Nairobi Show at Sh.9 each. The
badges cost Sh.5 to produce and you incur Sh.2000 to rent a booth in the Showground.

Required:

a) Compute the breakeven point

b) Compute the margin of safety

c) Compute the number of units that must be sold to earn a before-tax profit of 20%

d) Compute the number of units that must be sold to earn an after-tax profit of Sh.1640, assuming that the tax rate is 30%.

Answer rating: 100% (QA)

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