Hedges Ltd has fixed costs of £8,000. The variable costs are £4 per unit. The revenue (selling price) is £6 per unit.

You are required:

(i ) to draft a schedule as follows filling in the columns

(a) to ( f ) for each stage of 1,000 units up to 10,000 units;

(ii ) also to draw a break-even chart from the data in this schedule. Draw it carefully to scale on a piece of graph paper. Retain your answer: you will need it for some questions which follow later.

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(b) (S) No. of units Fixed Variable Total cost Revenue Profit Loss cost cost 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000