Accounting Management

2. Where applicable round the FINAL answer up to nearest whole number. Question 1 Batho Pele Plc sells three products the details of which are as follows: Product: Cake Scorns Muffins M M M 2/4 Selling price per unit 80 65 45 Variable cost per unit 60 40 15 Contribution per unit 20 25 30 Fixed costs: M742,250 Target profit: M400,000 Sales units: 200 000 300 000 500 000 Required: a) Calculate the Break-even sales revenue and the corresponding revenue for the individual products. (13marks) b) Using planned sales of M2,750,000 calculate and explain the margin of safety in percentage terms for the company. (4marks) c) Explain why the assumption that variable costs remains constant may not be practically sound. (2marks) d) State One benefit of CVP analysis to Batho Pele Plc business (1marks)