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JJ Ltd manufactures a product which has a selling price of £14, a variable cost of £6 per unit. The company incurs annual fixed costs of £24,400. Annual sales demand is 8,000 units. New production methods are under consideration, which would cause a 30 per cent increase in fixed costs and a reduction in variable cost to £5 per unit. The new produc- tion methods would result in a superior product and would enable sales to be increased to 8,500 units per annum at a price of £15 each. If the change in production methods were to take place, the breakeven output level would be: (A) 122 units higher (B) 372 units higher (C) 610 units lower (D) 915 units higher JJ Ltd manufactures a product which has a selling price of £14, a variable cost of £6 per unit. The company incurs annual fixed costs of £24,400. Annual sales demand is 8,000 units. New production methods are under consideration, which would cause a 30 per cent increase in fixed costs and a reduction in variable cost to £5 per unit. The new produc- tion methods would result in a superior product and would enable sales to be increased to 8,500 units per annum at a price of £15 each. If the change in production methods were to take place, the breakeven output level would be: (A) 122 units higher (B) 372 units higher (C) 610 units lower (D) 915 units higher
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Related Book For
Accounting For Cambridge International AS And A Level
ISBN: 9780198399711
1st Edition
Authors: Jacqueline Halls Bryan, Peter Hailstone
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