3) TZT Ltd has fixed costs for buildings, machines, and employees of 12,000 a week. Raw material and other variable costs are 50 a unit.

(Total 15 marks)

a) What is the break-even point if the selling price is 130 a unit?

b) What is the profit / loss if sales remain at 200 units a week with a selling price of 130 a unit?

c) What is the break-even point if the selling priced is reduced to 80 a unit?

d) What is the profit / loss if sales remain at 200 units a week with a selling price of 80 a unit?

e) Explain the reasons for the change in profit / loss in your answers of part b) and d)