(a) How far is it true to state that a company’s break-even point occurs where the contribution just equals the fixed costs? (5 marks)

(b) A company’s detailed information of costs and sales has been destroyed because of a computer malfunction. The following data has, however, been gleaned from various sources:

Selling price per unit at all volumes of output is £12.30 Calculate:
(i ) the cost of an additional 2,000 units of output;
(ii ) the variable costs of 10,000 units of output;
(iii ) the fixed element – if any – of each component cost;
(iv) the break-even point.

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Sales volume (units) 10,000 12,000 Costs (): direct materials 30,000 36,000 direct labour 28,000 33,000 overheads 20,500 24,100