BREAK-EVEN ANALYSIS

Question 6 Factory Cine produce soft toys. Annual manufacturing cost as below: Total direct material Total direct labour Total indirect labour - variable Total indirect labour - fixed Other annual overhead costs: Variable Fixed RM10,000 RM8,000 RM5,000 RM120,000 Required: RM4,000 RM70,000 Volume of annual sales - 40,000 units. Annual revenue at RM200,000 a) Calculate the breakeven point in units & sales value. b) If variable cost increases by 30%, what is the new breakeven point? c) If fixed cost increases by RM50,000, what is the new breakeven point? d) State TWO (2) limitation of breakeven analysis. e) Draw a break-even chart and label/show all the important information. (6 marks) (4 marks)