4. You have recently been employed as a Management Accountant for The Hovis Plc. The Executive Manager has requested more information about cost-volume-profit analysis. You are required to: Define the terms Fixed and Variable cost. (5 marks) Explain how understanding the distinction between fixed and variable costs can be useful to managers. (5 marks) a) b) c) What is meant by Break-even point (BEP) for an activity? (5 marks) d) e) g) How is the break even point (BEP) calculated? (2 marks) Why is it useful to know the BEP? (5 marks) What are the limitations of Break-even analysis? (8 marks) The Hovis PLC produces plastic chairs. The chairs are sold for 50 each and have variable costs of 30 each. The fixed costs of the company are 500,000. How many chairs do they need to sell to break even and make a target profit of 100,000? (10 marks)