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2 Elsie and Elorm are the directors of Volta Company Limited which manufactures and sells a telephone answering machine. The company's contribution format profit and
2 Elsie and Elorm are the directors of Volta Company Limited which manufactures and sells a telephone answering machine. The company's contribution format profit and loss account for the most recent year is given below: Sales (20,000 units) Total (GHC) Per Unit (GHC) % of Sales 1,200,000 Less Variable costs 900,000 Contribution Margin 300,000 FIXED OVERHEAD 240,000 COSTS Profit 60,000 60.00 100% 45.00 7% 15.00 ?% Fixed overhead costs for the period was expected to be GHS 240,000.00 and budgeted sales for the period was expected to 20,000 units. The Directors of Volta Company Limited expects a target profit of GHS 90,000.00 Required: a. The Breakeven point in units and sales value b. The Contribution to sales margin c. The Margin of safety in units and in percentage d. The units to produce and sale to achieve the Target Profit of GHS 90,000.00
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