Break-even, contribution and profit- volume graph

(a) From the following information you are required to construct: (i) a break-even chart, showing the break- even point and the margin of safety; (ii) a chart displaying the contribution level and the profit level; (iii) a profit-volume chart..

(b) State the purposes of each of the three charts in

(a) above. (6 marks)

(c) Outline the limitations of break-even analysis. (5 marks)

(d) What are the advantages of graphical presen- tation of financial data to executives?

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Sales 6000 units at 12 per unit 72000 Variable costs 6000 units at 7 per unit Fixed costs 42 000 = 20 000 (9 marks)