Calculate the total revenue required to break even. b) Calculate the number of units of each product required to break even. c) Calculate the Margin of Safety. d) The sales manager has suggested a marketing initiative that would result in an increase in **fixed costs by 15% and an increase in Labour & Materials cost by ?0.20 per unit, this initiative would result in an increase sales volume of 10%. (** Note the increase in Fixed costs will also affect the fixed element of the Semi Fixed / Semi Variable costs) Calculate the revised revenue required to break even and the margin of safety if the initiative is implemented. e) Should the sales manager's proposal be implemented?

Cavan Ltd produces FOUR products. Budgeted information relation to the products is presented below. Product A Product B Product C Product D Sales Volumes 42,500 60,000 55,000 42,500 Selling Price per unit 3.80 2.20 6.20 4.30 Costs Labour & Materials per unit 1.80 0.90 2.90 1.90 Fixed overheads 0.70 0.40 0.40 0.6 Other Costs See information in question Other costs relate to Semi Fixed / Semi Variable costs these costs are budgeted at 160,000 and are estimated to be 60% fixed: 40% Variable. These costs are to be distributed to products on the basis of the budgeted sales volumes.