Question
Charted Ltd manufactures three types of fruit juice: Orapine, Bananago and Pinemelon. The budgeted sales prices, sales volumes and costs for the next year are
Charted Ltd manufactures three types of fruit juice: Orapine, Bananago and Pinemelon. The budgeted sales prices, sales volumes and costs for the next year are as follows:
| Orapine | Banango | Pinemelon |
Selling price per unit (GHS) | 1,600 | 1,800 | 1,400 |
Sales units | 420 | 400 | 380 |
Material cost per unit (GHS) | 430 | 500 | 360 |
Labour cost per unit (GHS) | 220 | 240 | 190 |
Variable overheads per unit (GHS) | 110 | 120 | 95 |
Sixty per cent of the labour costs are fixed, and forty per cent are variable. The company expects the general fixed overheads, excluding any fixed labour costs, to be GHS55,000 for the next year. Determine the margin of safety units for each product.
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