Intermediate: Break-even and Profit-volume charts ZED pic manufactures one standard product which sells at £10.

You are required:

(a) to prepare, from the data given below, a graph showing the results for the six months ended 30 April and to determine:

(i) the fixed costs;

(ii) the variable cost per unit;

(iii) the PN ratio;

(iv) the break-even point;

(v) the margin of safety;

(b) to discuss the limitations of such a graph;

(c) to explain the use of the relevant range in such a graph.

Transcribed Image Text:

Month Sales Profit/(loss) (units) () November 30 000 40000 December 35 000 60000 January 15000 (20000) February 24 000 16000 March 26 000 24000 April 18000 (8000)