Daly Company has determined the number of units of product Y that Daly would have to sell in order to break even. However, Daly would like to attain a 20% profit on sales of product Y. : pg56 Required:

a Explain how break-even analysis can be used to determine the number of units of product Y that Daly would have to sell to attain a 20% profit on sales.

b_ If variable cost per unit increases as a percentage of the sales price, how would that affect the number of units of product Y that Daly would have to sell in order to break even and why?

¢ Identify the limitations of break-even analysis in managerial decision making.