Express limited, a manufacturing company, is considering an expansion of its current plant capacity The current fixed
Question:
Express limited, a manufacturing company, is considering an expansion of its current plant capacity The current fixed costs amount to Ksh 58 8 million and are expected to increase by Ksh 17 5 million after the expansion The current variable costs amount to Ksh 770 per unit and are expected to reduce by Ksh 126 per unit after the expansion The current production capacity is 160 000 units per annum and is expected to increase by 50 after the expansion The current selling price per unit is Ksh 2 240 and is expected to remain unchanged after the expansion The targeted profit for the year is Ksh 210 million
Required i. The breakeven number of units before the expansion ii. The breakeven number of units after the expansion iii. Determine whether the targeted profit is achievable before the expansion iv. Determine whether the targeted profit is achievable after the expansion