Question $1[25$ marks$]$

Francesca manufactures a single product X $.$

The following budgeted information is available for product $x$ for the month December

REQUIRED

$($a$)$ From the above information prepare a budgeted income statement for the month of

December $2019$ under marginal costing format showing clearly the contribution.

$[4$ marks$]$

$($b$)$ Calculate the break$-$even point in units and $$.$

$[2$ marks$]$

$($c$)$ Calculate the percentage margin of safety.

$[1$ mark$]$

$($d$)$ Calculate the sensitivity ratio $($in percentage$)$ of a change in the following variables

on profit:

$($i$)$ Selling price;

$($ii$)$ Variable cost per unit;

$($iii$)$ Total fixed costs; and

$($iv$)$ Sales volume.

$[4$ marks$]$

$($e$)$ From your answers in $($e$)$ above, state which of the variables is the most sensitive$,$

explaining the impact of the variable on profit.