To achieve outcome

Understand and Calculate Contribution per unit for 2018 and 2019

Determine the Break-Even point and margin of safety for 2018 and 2019

Break-Even Units for 2018 and 2019

Break-Even Revenue 2018 and 2019

Margin of safety 2018 and 2019

write a comment on the result explaining what the results say about Sams Ltd. washing machines.

discuss key assumptions attached to the breakeven model, within the light of the reality of todays business environments using authentic journals and articles to justify their points.

Useful Formulas

Contribution = Sales - Variable Cost

Contribution ratio = contribution/sales * 100%

Break-even point in sales = fixed costs / contribution per unit

Margin of Safety = (Actual Sales Break Even Point) / Selling Price Per Unit

I really need to get this right

020 ( Task 3: Learning outcome 3 - (25 marks) Sam Lad is specialized in producing and selling washing machines. In 2018, the manufacturing cost per unit included: Direct material 125 Direct labor (20 minutes per unit) 45/hour Variable manufacturing overhead 20 Variable selling expenses 15 Variable administrative expenses 10 Fixed costs for the year ended 31 December 2018 were: 21 E000 Faced manufacturing 1.100 Fixed selling and distribution 1.450 Fixed administrative 675 16 - Salas The company produced and sold 220.000 units at 225 per unit. In 2019, management has decided to increase the selling price by 25% and to maintain the same contribution margin ratios last year. This increase in price is to meet an increase of 1,450,000 in fixed costs in 2019. The company has produced and sold the same quantity in 2019 as last year. divide Required you (a) Calculate the break-even point and margin of safety in both units and revenue for the two years, 2018 and 2019, and briefly comment upon the results (10 marks) (b) Critically discuss key assumptions attached to the breakeven model, within the light of the reality of today's business environments. (15 marks) (LO 3,25 marks - 500 words) 17 7 25 age 6 of 9 1873)