Question
Data from the latest income statement of XYZ Pty Ltd for the last 12 months is extracted as follows. You need to customize the name
Data from the latest income statement of XYZ Pty Ltd for the last 12 months is extracted as follows. You need to customize the name and figures to make it unique. (6 Marks) Annual Volume 45,000 Units Selling price per unit $85 Variable manufacturing cost per unit $45 Annual fixed manufacturing costs $250,000 Variable marketing and distribution costs per unit $15 Annual fixed non-manufacturing costs $350,000 1. Calculate and interpret the break-even point in both dollars and units for 2019. 2. Calculate and interpret the margin of safety in both units and sales dollars. 3. Calculate and interpret the profit achieved in 2019. 4. Changes in marketing strategy are planned for 2020. This would increase variable marketing and distribution costs by $10 per unit and reduce fixed non-manufacturing costs by $50,000 per year. Calculate the units that would need to be sold in 2020 to achieve the same profit as in 2019.
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