Astrabudgets to sell 1 product, Widget, and has provided you with the following selling prices and variable costs:

Product

Sales Units Selling Price per unit Variable Cost per unit

Widget 4,000,000 24 18

Annual fixed costs are budgeted at 12,000,000

Required:

5) Calculate the contribution per unit

6) Calculate the total budgeted profit.

7) Calculate the % contribution / sales ratio for Astra (Enter number only)

8) Calculate the breakeven in sales quantity

9) Calculate the breakeven insales revenue

10) What is the current margin of Safety in units

11) How many units ofWidgetwould Astra Ltd need to sell to earn a total profit of 18,000,000?

12) Management are deciding whether to spend an extra 3,000,000 on advertising and sales promotion of Product Widget. It is considering reducing its selling price to 21 per unit, resulting in expected sales of 6,500,000 units.

Required:

Calculate the revised contribution per unit if decision was taken.

a)Calculate the revised profit if the decision in Q 12 is taken,