Question
DCK (Pty) Ltd produces a single product. You were given the following information regarding the product: Pula (per unit) Selling price 60.00 Variable production costs
DCK (Pty) Ltd produces a single product. You were given the following information regarding the product: Pula (per unit) Selling price 60.00 Variable production costs 12.00 Variable selling cost 4.00 Fixed production cost 40.00 Fixed selling cost 8.00 Budgeted production is 10,000 units.
Required: Determine the following: a. Breakeven point in units (2 marks) b. Number of units to be sold if the company wants to achieve a profit of P110,000. (3 marks) c. Breakeven point in Pula, if the variable production cost and selling price per unit are expected to rise by 10% and the fixed production costs rise by 25%. All other costs remain the same.
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