Question
Can you please help with the following Question 2 Mrs Mac sells burgers and is considering whether to open a second outlet. The burgers have
Can you please help with the following
Question 2
Mrs Mac sells burgers and is considering whether to open a second outlet. The burgers have a single selling price and identical costs, regardless of where they are produced.
The following data is supplied:
Variable data per burger:
Selling Price$6.00
Purchase Costs$3.90
Selling & Promotional Costs$0.30
Annual Fixed Costs:
Rent$60,000
Salaries $200,000
Other$100,000
Required: (Consider each part independently)
( a )Calculate the annual break even point in unit sales.
( b )If 220,000 burgers were sold, calculate the profit or loss.
( c )Calculate how many burgers must be sold to achieve a target profit before tax of $167,940.
( d )Calculate how many burgers need to be sold to achieve an after tax profit of $126,000 if the tax rate is 30%.
( e )If the selling costs are $0.60 per unit, calculate the annual break even point in dollar sales.
( f )If the budget is to sell 300,000 burgers, what is the Margin of Safety?
( g )List two assumptions which need to be considered regarding Cost volume profit analysis.
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