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A company manufactures and sells a single product, ABC. The company budgets to produce and sell 5,000 units at $800 each. The following represents an

A company manufactures and sells a single product, ABC. The company budgets to produce and sell 5,000 units at $800 each. The following represents an extract from the standard cost statement for the product:

Description

Unit Cost/$

Direct materials

250.00

Direct labour

180.00

Variable overhead

120.00

550.00

Fixed overhead

80.00

Total cost

630.00

Required:

  1. Calculate the Break-even point in units and sales revenue.
  2. Calculate the contribution to sales ratio and state as a percentage
  3. Calculate the margin of safety in units and revenue.
  4. Calculate the budgeted profit for the period.
  5. Calculate the percentage increase in profit if sales volume is increased by 30 percent.
  6. Calculate the extra units to be sold in order to maintain the same profit level as in e if the selling price is reduced by 10 percent.

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