QUESTION I Imagine you are setting up a business which specialises in only two products. Your...

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QUESTION I Imagine you are setting up a business which specialises in only two products. Your business must provide tangible products (e.g. coffee shop or fast food). The business should be a maker of the product out of few ingredients/inputs, not a retailer. Required: For the first year of operations: a) Forecast the quarterly sales in units and money (they should not be the same each quarter) for each product. (4 marks) Identify and forecast at least 4 variable cost items per unit for each of your chosen products. (4 marks) b) d) e) f) 9) Identify and forecast at least 7 items of fixed cost related to the business. (3.5 marks) Calculate both the number of units (to the nearest unit) and the revenue the company needs to break even using the marginal costing system for each product. (3 marks) Calculate the annual margin of safety expressed as a percentage, and as number of units based on the forecasted sales in I for each product. (4 marks) Prepare the annual marginal costing income statement based on your budgeted sales volume for each product. (6 marks) Make a comparison between the two products and recommend which is better in terms of breakeven analysis with supporting comments. (4.5 marks) Note: All the compiled numbers of your business must be reasonable and financially feasible (based on your choice of industry) and must be in Sterling. An extra mark may be awarded for presentation. (1 mark) QUESTION I Imagine you are setting up a business which specialises in only two products. Your business must provide tangible products (e.g. coffee shop or fast food). The business should be a maker of the product out of few ingredients/inputs, not a retailer. Required: For the first year of operations: a) Forecast the quarterly sales in units and money (they should not be the same each quarter) for each product. (4 marks) Identify and forecast at least 4 variable cost items per unit for each of your chosen products. (4 marks) b) d) e) f) 9) Identify and forecast at least 7 items of fixed cost related to the business. (3.5 marks) Calculate both the number of units (to the nearest unit) and the revenue the company needs to break even using the marginal costing system for each product. (3 marks) Calculate the annual margin of safety expressed as a percentage, and as number of units based on the forecasted sales in I for each product. (4 marks) Prepare the annual marginal costing income statement based on your budgeted sales volume for each product. (6 marks) Make a comparison between the two products and recommend which is better in terms of breakeven analysis with supporting comments. (4.5 marks) Note: All the compiled numbers of your business must be reasonable and financially feasible (based on your choice of industry) and must be in Sterling. An extra mark may be awarded for presentation. (1 mark)