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(a) You have asked the accountant for four budgets based on different economic forecasts. He started work on these, but has fallen ill and cannot
(a) You have asked the accountant for four budgets based on different economic forecasts. He started work on these, but has fallen ill and cannot complete the figures in time. His secretary has found the work he has done to date which is as follows: Economic Forecast- Depressed Average Good Excellent Variable costs (K000s) 40 60 90 140 There are fixed costs of K72,000 and the C/S ratio is 60%. Required: Calculate: (i) The profit or loss at each of the four levels; (ii) The break-even point in sales value; (iii) The sales value at which a profit of K15,000 would be made. (b) Outline the limitations of CVP analysis. (c) How should under- and over-absorbed overheads be disposed of
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