19.8 Fullbright Bognor Limited, a manufacturing business, has the following cost structure:

Selling price per unit: £85 Variable costs per unit: £41 The company's directors expect to incur fixed costs of £62 000 in the year ending 31 December 20X1. The maximum level of production which the company can reach is 3000 units per year.

You are required to:

i) Draw a break-even chart recording: fixed costs; total costs; total revenue.

ii) From the chart estimate the break-even point in units and in sales value for Fullbright Bognor for the year ending 31 December 20X1.

iii) Use the break-even formula to find the break-even point in units and in sales value for Fullbright Bognor for the year ending 31 December 20X1.

Remember that:

Break-even point (in units) =

Fixed costs Contribution per unit