*IN COST ACCOUNTING* ACCT301

Q3. ALC ltd. manufactures a product X for which the selling price per unit, variables cost per unit, and fixed costs are as follows: (4 Marks)

Selling price per unit SAR 750

Variable cost per unit SAR 225

Total Fixed Costs SAR 425,000

Answer the following questions using cost volume profit analysis:

a) Determine the break-even point in units.

b) Determine the break-even point in sales SAR.

c) What will be the pretax profit if the company sells 1,400 units of the product?

d) How many units the company will be required to sell to reach a target pretax profit of SAR 200,000?

e) The margin of safety in units if the companys estimated next year budgeted sales are 1,500 units.