1. Explain the break-even point

2. What is the unit contribution margin? How is it computed?

3. What is the margin of safety?

4. List the assumptions that underlie basic cost-volume-profit analysis.

5. Ambar Limited makes this data available: Normal sales RM 2,000,000

Annual fixed costs RM 300,000

C/S ratio 25%

Required:

(a) The breakeven point in value (RM)

(b) The margin of safety

(c) The target sales to earn a net profit of RM 450,000