HA2011 full ques a and b ans needed

Question 5 (7 marks) Stylo Ltd produces a special video tech product with the following annual data for next year: Required: ** SHOW YOUR WORKINGS FOR ALL SECTIONS a) How many units in total must be sold to break even? (1 mark) ANSWER a): b) Prepare a contribution margin income statement for next year when they expect to sell 1000 units. (1.5 marks) ANSWER b): c) What is the expected safety margin in units if it sells 1000 units next year? (1 mark) ANSWER c): d) Should management be concerned about the safety margin calculated in (b)? Explain your answer. (1.5 marks) ANSWER d): [ e) What dollar sales will Stylo Ltd need to generate in order to realize a target profit of $600,000 ? ( 2 marks) ANSWER e)