1. Clover Co are manufacturing and selling commercial vacuum cleaners. They have gathered following expected information for the year 2020:

Selling price (per unit)	425.00
Direct materials (per unit)	105.00
Direct labour (per unit)	56.00

Other costs are estimated for the year 2020 based on the expected sales of 92,000 units. These costs are given below:

		Fixed Costs	Variable Costs
Operating Costs		1,150,000	6,450,000
Marketing Costs		240,000	8,200,500
Storage Costs		80,000	942,000
Administration Costs		550,000	-

For the year 2020, showing all your working clearly, you are required to calculate:

1. the expected profit or loss

(2 marks)

2. breakeven point in units and sales revenue

(2 marks)

3. margin of safety in units and % change

(2 marks)

4. the profit/loss if the selling price is increased to 450 and sales quantity decreases by 20%

(2 marks)

5. the revised break-even point in units for (d)

(2 marks)

6. explain the importance of computing break-even point for a Clover Co.

(10 marks)

(Total 60 marks)