Intermediate: Preparation of break-even and profit-volume graphs. ZED plc manufactures one standard product, which sells at 10.
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Intermediate: Preparation of break-even and profit-volume graphs. ZED plc manufactures one standard product, which sells at £10. You are required to:
(a) prepare from the data given below, a break-even and profit-volume graph showing the results for the six months ending 30 April and to determine:
(i) the fixed costs;
(ii) the variable cost per unit;
(iii) the profit-volume ratio;
(iv) the break-even point;
(v) the margin of safety;
(b) discuss the limitations of such a graph;
(c) explain the use of the relevant range in such a graph. (20 marks)
CIMA Cost Accounting 2
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