Favoured company makes a single product with a sales price sh10 and a marginal cost of sh6. Fixed costs

are sh60,000 per annum.

work out the following.

a) Number of units to break even

b) Sales at break-eve point

c) C/S ratio

d) What number of units will need to be sold to achieve a profit of sh20,000 p.a.?

e)sales for target profit.

Outline the limitations of CVP analysis