The following information relates to XYZ Ltd;

$

Selling price per unit 12

Variable cost per unit 8

Total fixed cost 3000

Assume corporation tax rate of 30%

Required

(i)Calculate the BEP in units and dollars.

(ii) If the company have a target profit before tax of 20% of sales, what is the number of units that have to be sold to achieve this target profit.

(iii)Given a target profit of 3,600 after tax, how many units should be sold to achieve the target profit.

(iv)If the actual sales were 910 units, calculate the margin of safety in units and percentage.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below Solution iThe Breakeven point BEP is th... View the full answer