Sylvia runs a small shop selling traditional English pies. The cost of the ingredients for making each pie is 48p. It also costs 2p for each paper bag. She pays herself a salary of £1,500 every month, the rent on the shop is £950, and insurance and utility costs are £350. The selling price is £2 for each pie.
(a) Showing all workings, determine the break-even point in terms of:

Quantity (round up/down to the nearest whole pie) and Sales value.

(b) How much profit would Sylvia make if she sells 2,000 pies each month? Please show all workings.

(c) Showing all workings, if Sylvia sells 2,000 pies each month, determine the margin of safety in terms of:

Quantity (round up/down to the nearest whole pie) and Sales value.

(d) Give THREE reasons why the break-even point is important for a business manager.

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During 20X1, Discolux Ltd. had two classes of shares outstanding: . Class A preferred shares, 3,000 shares issued and outstanding at the beginning of the year; quarterly dividend rate of $250 per share, cumulative; each share is convertible into 50 shares of Class B common. . Class B common shares, 161,000 shares issued and outstanding at the beginning of the year. Also assume the following: Net income for the year is $3,400,000; there are no discontinued operations, • 700 shares of Class A were converted into 35,000 Class B shares on 1 April 20X1; dividends for the first quarter of the year were paid on 30 March 20X1. • Options to issue 15,000 common shares to senior executives for $5 per share were outstanding during the entire year. No options were exercised during the year. The average share price during the year was $10. Required: 1. Determine the weighted-average number of shares outstanding during 20X1. Weighted average number of shares 2. Determine basic EPS. (Do not round Initermediate calculations and round your answer to 2 decimal places.) Basic ESP ces 3. Determine diluted EPS.(Do not round intermediate calculations and round your answer to 2 decimal places.) Diluted EPS During 20X1, Discolux Ltd. had two classes of shares outstanding: . Class A preferred shares, 3,000 shares issued and outstanding at the beginning of the year; quarterly dividend rate of $250 per share, cumulative; each share is convertible into 50 shares of Class B common. . Class B common shares, 161,000 shares issued and outstanding at the beginning of the year. Also assume the following: Net income for the year is $3,400,000; there are no discontinued operations, • 700 shares of Class A were converted into 35,000 Class B shares on 1 April 20X1; dividends for the first quarter of the year were paid on 30 March 20X1. • Options to issue 15,000 common shares to senior executives for $5 per share were outstanding during the entire year. No options were exercised during the year. The average share price during the year was $10. Required: 1. Determine the weighted-average number of shares outstanding during 20X1. Weighted average number of shares 2. Determine basic EPS. (Do not round Initermediate calculations and round your answer to 2 decimal places.) Basic ESP ces 3. Determine diluted EPS.(Do not round intermediate calculations and round your answer to 2 decimal places.) Diluted EPS

Answer rating: 100% (QA)

a The break even point in terms of quantity is 1 000 pies and in terms of sales value is 2 000 To calculate the break even point in terms of quantity ... View the full answer