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4 DH Limited manufactures a single product. The following information is available for one unit of that product: Selling price Direct material Direct labour Variable
4 DH Limited manufactures a single product. The following information is available for one unit of that product: Selling price Direct material Direct labour Variable overhead Fixed overhead Scale document down Budgeted production is 200 000 units per annum. REQUIRED al Calculate the annual break yon point in unite Additional information The directors are considering reducing the selling price of the product by 10%. The new selling price would be lower than that of competitors. The directors are confident that as a result of this sales volume would increase by 50%. In order to produce the budgeted units, the company's labour force is currently working at 80% capacity. Workers will be paid an overtime premium of 25% for all production over 100% capacity. The additional production would enable the company to qualify for 12.5% discount on all direct materials. The revised production would result in the fixed overhead cost per unit reducing by 30% for all units produced. REQUIRED c) Calculate the total budgeted annual profit the directors proceed with the plans (d) Calculate the revised break-even point in t h e directors proceed with the plans (e) Calculate the margin of safety in units and as a percentage the direction proceed with
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