Question
A company has the following costs for the first quarter of 2021 Cost Item Shs. Employee salaries. 17,000 Rent. 11,000 Insurance. 2,000 Depreciation on equipment.
A company has the following costs for the first quarter of 2021
Cost Item Shs.
Employee salaries. 17,000
Rent. 11,000
Insurance. 2,000
Depreciation on equipment. 6,000
Variable costs: Labour 24,000
: Materials 14,000
: Direct Expenses 2,000
: Overheads 2,000
Additional information:
The selling price per unit is Shs. 10.
The above variable costs relate to activity level of Shs. 60,000 sales.
All other costs except those indicated as variable are fixed.
The budgeted sales for the year are Shs. 200,000
Required:
i)Calculate the break-even point in units and in shillings.
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