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Abiola ltd produces product T. The projected income statement for the year 2013 is as follows: Sh. Sh. Sales (50,000 units) 3,000,000 Variable cost Direct
Abiola ltd produces product T. The projected income statement for the year 2013 is as follows: Sh. Sh. Sales (50,000 units) 3,000,000 Variable cost Direct materials 700,000 Direct labor 400,000 Direct expenses 300,000 Variable overheads 160,000 (1,560,000) Contribution Margin 1,440,000 Less fixed costs 800,000 Net profit 640 000 Required: 1. Break-even point in units and revenue (4 Marks) 2. How many units to be sold to earn a profit of sh.150,000 (4 marks) For the projected level of sales, compute the margin of safety in units (2 marks)
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