A company manufactures a single product. Budget and standard cost details for next year include: Required: (i)

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A company manufactures a single product. Budget and standard cost details for next year include:

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Required:
(i) Calculate the break-even point in units.
(ii) Calculate the percentage by which the budgeted sales can fall before the company begins to make a loss.
The marketing manager has suggested that the selling price per unit can be increased to $25.00 if the sales commission is increased to 8 per cent of selling price and a further $10,000 is spent on advertising.
(iii) Calculate the revised break-even point based on the marketing manager’s suggestion.

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Management Accounting For Business

ISBN: 9781138550650

8th Edition

Authors: Colin Drury, Mike Tayles

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