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Hygienics Co produces free-standing sanitiser units for domestic and commercial use. They produce a single product in a highly competitive market. They have gathered the

Hygienics Co produces free-standing sanitiser units for domestic and commercial use. They produce a single product in a highly competitive market. They have gathered the following expected information for the year 2021:

Selling price (per unit)

Direct materials (per unit)

Direct labour (per unit)

155.00 60.25 30.50

Other costs are estimated for the year 2021 based on the expected sales of 62,000 units. These costs are given below:

Fixed Costs

Variable Costs

Operating Costs

420,000

1,750,000

Marketing Costs

350,000

122,500

Storage Costs

570,000

101,000

Administration Costs

232,000

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For the year 2021, you are required to calculate:

  1. the expected profit or loss (5 marks)

  1. breakeven point in units and sales revenue (5 marks)

  1. margin of safety in units and % change (5 marks)

  1. the profit/loss if the selling price is increased by 5% and sales quantity decreases by 50% (5 marks)

  1. the revised break-even point in units for (d) (5 marks)

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