The following data relate to Kenya Ltd for the year ended 31 December 2016. Sh '000'...

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The following data relate to Kenya Ltd for the year ended 31 December 2016. Sh '000' 24,000 20,000 4,000 Sales Less: Total costs Net profit Fixed costs account for 40% of the total costs. Required: i) ii) Margin of safety. Break-even point in sales (4 marks) (4 marks) (3 marks) iii) Sales required to earn profit of Sh 6,000,000. iv) In order to increase sales, the management has the following two options: 1. To increase sales by 25% on incurring a sales promotion cost of Sh 2,500,000. 2. To increase sales by 15% on reducing selling price by 5%. Advise the management on which option they should take. (8 marks) The following data relate to Kenya Ltd for the year ended 31 December 2016. Sh '000' 24,000 20,000 4,000 Sales Less: Total costs Net profit Fixed costs account for 40% of the total costs. Required: i) ii) Margin of safety. Break-even point in sales (4 marks) (4 marks) (3 marks) iii) Sales required to earn profit of Sh 6,000,000. iv) In order to increase sales, the management has the following two options: 1. To increase sales by 25% on incurring a sales promotion cost of Sh 2,500,000. 2. To increase sales by 15% on reducing selling price by 5%. Advise the management on which option they should take. (8 marks)

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