Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

BU PLC., manufactures and sells a unique product known as B.Sc. the selling price of which is 20. The summarized profit and loss statement

 

BU PLC., manufactures and sells a unique product known as B.Sc. the selling price of which is 20. The summarized profit and loss statement for 31/12/2007 is as follows: N 600,000 Sales Direct Material Direct Wages Variable Prod. O/H Fixed Production O/H Selling & Distribution Administration Net Profit before tax Less Tax at 40% Profit after Tax Required 11. 111. iv. 90,000 120,000 60,000 75,000 56,000 45.000 446,000 154,000 61.600 92.400 Calculate the break-even point both in units and sales value. Calculate the sales value required to achieve a net profit before tax 15% of total revenue. Assuming no change in unit selling price and cost structure, calculate the percentage increase in sales volume required in the current year to produce a profit before tax 20% higher than that of 2007 result. Determine the volume of sales in naira the company must achieve in 2008 to maintain 2007 net profit if the selling price remains at 20 and variable cost per unit increase by 12%.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

To calculate the breakeven point we need to determine the number of units and sales value required to cover all costs The breakeven point occurs when the total revenue equals total costs First lets ca... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer

12th Edition

978-0073526706, 9780073526706

More Books

Students also viewed these Accounting questions

Question

Is this the best time to buy?

Answered: 1 week ago

Question

Describe what is meant by a pull production system.

Answered: 1 week ago