Exemplar Financial Reports

You are to prepare a set of exemplar financial reports, which the trainee accountants can place in the file and use for reference.

You must:

• Prepare and analyse break-even data from the costing information in Appendix 3.

• Appendix 3

  ABC Production Ltd produces a single product.

  Its costs and sales for the year ended 31 December were as follows:

  Units sold	20 000
  Sales revenue	900 000
  Direct wages	200 000
  Direct materials	300 000
  Variable overheads	120 000
  Fixed costs	205 000

  The selling price and all costs were at a constant rate throughout the year.

  To improve profit for the next year, the following changes are planned:

• Units to be sold to increase by 10%.
• Selling price to be maintained at the current price.
• Wages to be increased by 3% per unit.
• Material costs to be reduced by 5% per unit, this being achieved by changing from a local supplier to an overseas supplier.
• Variable overheads to be reduced by 0.45 per unit.
• Fixed costs to increase by 7 500 per annum.