A company produces and sells two products with the following costs :

Total sales revenue is currently generated by the two products in the following proportions :

Required:

(a) Calculate the break-even sales revenue per period, based on the sales mix assumed above.

(b) Prepare a prof it volume chart of the above situation for sales revenue up to £4,000,000. Show on the same chart the effect of a change in the sales mix to Product X 50%, Product Y 50% . Clearly lindicate on the chart the break-even point for each situation.

(c) Of the fixed costs £455.000 are att ributab le to Product X. Calculate the sales revenue required on Product X in order to recover the attr ibutable fixed costs and provide a net contribution of £700.000 towards general fixed costs and profit.

Transcribed Image Text:

Product X Product Y 0.60 Variable costs (per of sales) Fixed costs 0.45 1,212,000 per period.