The following budget has been prepared for the production and sales of 20 000 units of a product.

Required 

Calculate the profit and the break-even point if 

(i) Fixed costs increase by 15% and are not passed on to customers

(ii) Variable costs increase by 15% and are not passed on to customers (there is no increase in fixed costs) 

(iii) Fixed and variable costs increase by 15% and the increases are passed on to the customers.

Transcribed Image Text:

Fixed costs y variable costs Total costs Sales Profit Break-even occurs at $80 000 $5.75 80 000 60 000 Juli 140 000 175 000 35 000 = 13 914 units.