BREAK-EVEN ANALYSIS

Question 9 a) Information concerning Abraham Ltd's single product is as follows: Selling price per unit RM6.00 Variable Production per unit RM1.20 Variable Selling Cost per unit RM0.40 Fixed Production Cost per unit RM4.00 Fixed Selling Cost per unit RM0.80 Budgeted production and sales for the year are 10,000 units. Required: i) ii) iii) Calculate the breakeven point in units and dollars. (3 marks) How many units must be sold if the company wants to achieve a profit of RM11,000 for the year? (3 marks) It is expected now that the variable production cost per unit and the selling price per unit will each increase by 10% and fixed production cost will rise by 25%. What will be the new breakeven point? (4 marks)