BSA Company proposes to take on lease, a line of food vending machines, in a large...

Transcribed Image Text:

BSA Company proposes to take on lease, a line of food vending machines, in a large office complex. Although the unit selling prices and making cost differ among individual food items, the sales manager is of the view that an average unit selling price of Kshs. 2 and an average unit purchase price (variable cost) of Kshs. 1.60 will be adequate for the purpose of analysis to be made before taking a decision. The sales manager also estimates monthly fixed expenses (like rent, wages etc) of Kshs. 24,000. Required: i. Monthly breakeven point in number of units and in shillings value (3marks) ii. The monthly breakeven point in number of units and shillings sales if selling price falls to Kshs. 1.92 without any change in the fixed and variable expenses (2marks) BSA Company proposes to take on lease, a line of food vending machines, in a large office complex. Although the unit selling prices and making cost differ among individual food items, the sales manager is of the view that an average unit selling price of Kshs. 2 and an average unit purchase price (variable cost) of Kshs. 1.60 will be adequate for the purpose of analysis to be made before taking a decision. The sales manager also estimates monthly fixed expenses (like rent, wages etc) of Kshs. 24,000. Required: i. Monthly breakeven point in number of units and in shillings value (3marks) ii. The monthly breakeven point in number of units and shillings sales if selling price falls to Kshs. 1.92 without any change in the fixed and variable expenses (2marks)

Answer rating: 100% (QA)

The detailed answer for the above question is provided below i Monthly Breakeven Point in Number o... View the full answer