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ABC COMPANY LTD ABC has a factory in Chittagong, which produce the different instrument for the differ-ent types of amusing parks and leisure centers and
ABC COMPANY LTD ABC has a factory in Chittagong, which produce the different instrument for the differ-ent types of amusing parks and leisure centers and sold these across the country, it could make 500 units per year and it's cost structure is as follows: Fixed cost : $4.8 MILLION Variable cost : $56,000 Per instrument. The product sells for $60,000 each and they produce and sell 40 units per month at the moment. a) Draw a breakeven point chart for the company, fully table the chart, from the chart calculate the breakeven quantity revenue and margin of safety. b) The final manager of ABC produces a financial forecast for the coming trading year and identifies increases in energy costs and rent as threats to the business. The effect of these will be Fixed cost increase to $5.6 million Variable cost increases to $65000 per instrument Show these changes on the break even chart and calculate the effect of these costs increases on the ABC 's break even quantity revenue , margin and profit .fully label your diagram. c) (The finance manager proposes and increase in price to $85000 per instrument to cover the predict increase in costs) Calculate the output required for ABC company Ltd to make its target profit of $4.8million at the price and cost levels..comment on your result. ABC COMPANY LTD ABC has a factory in Chittagong , which produce the different instrument for the differ- ent types of amusing parks and leisure centers and sold these across the country. it could make 500 units per year and it's cost structure is as follows: Fixed cost : $4.8 MILLION Variable cost : $56,000 Per instrument. The product selss for $6000 each and they produce and sell 40 units per month at the moment. a) Draw a break even point chart for the company, fully table the chart, from the chart calculate the break even quantity ,revenue and margin of safety. b) The final manager of ABC produces a financial forecast for the coming trading year and identifies increases in energy costs and rent as threats to the business The effect of these will be : Fixed cost increase to $5.6 million Variable cost increases to $65000 per instrument Show these changes on the break even chart and calculate the effect of these costs increases on the ABC's break even quantity ,revenue , margin and profit .fully label your diagram. c) (The finance manager proposes and increase in price to $85000 per instrument to cover the predict increase in costs) Calculate the output required for ABC company Ltd to make its target profit of $4.8million at the price and cost levels ,comment on your result. End of document
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