BREAK-EVEN ANALYSIS

QUESTION 4 A company manufactures a single product for which cost and selling price data are as follows: Selling price per unit (RM) Variable cost per unit(RM) Fixed costs per month(RM) Budgeted monthly sales (units) Required: a) Calculate the following: i) ii) iii) iv) v) vi) 12 8 96,000 30,000 The break-even point (in units) and (in sales value) The margin of safety (in units) if the sales is as budgeted. The unit of sales to produce a profit of RM25,200. The profit when 25,000 units were sold. The new break-even point (in sales value) if the variable costs per unit increases to RM9. b) Discuss any TWO (2) limitations of break-even analysis. (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) The new break-even point (in units) if the fixed costs increases to RM110,600 per month, with no change in variable cost per unit. (3 marks) (2 marks)