A company sells three products: X, Y and Z. Cost and sales data for one period are as follows:

X Y Z

Sales volume 2,000 units 2,000 units 5,000 units

Selling price per unit GHS3 GHS4 GHS2

Variable cost per unit GHS2.25 GHS3.5 GHS1.25

Fixed costs GHS3,250

Required:

a. Construct a multiple-product graph and indicate the break-even point.

b. Outline four limitations of cost-volume-profit analysis.

c. Explain the term margin of safety and show its significant.

d. GL produces and sells single product with a standard quality. An analysis of its costing records revealed the following data: Selling price per unit GHS40, Variable cost per unit GHS20, Fixed cost GHS120,000 and Existing capacity 16,000 units Required:

Calculate :

i. Break-even point in units and in value

ii. Number of units to be sold to get a profit of GHS60,000

iii. If fixed cost is reduced by GHS20,000 and results in 10% reduction in variable cost, what would be the net profit for the existing sales capacity?

iv. The selling price to be charged to show a profit of GHS60,000 on sales of 16,000 units.

v. Additional sales volume to meet GHS16,000 additional fixed cost.