Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Mike Ltd. has the following information available for this year: September October Total costs $86,000 $146,000 Budgeted sales (units) 15,000 30,000 The selling price is
Mike Ltd. has the following information available for this year:
|
| September | October |
| Total costs | $86,000 | $146,000 |
| Budgeted sales (units) | 15,000 | 30,000 |
The selling price is $12 per unit.
- What is Mike Ltd.s margin of safety in units for September?
- If next year, fixed cost rise by 12%, variable costs fall by 4% and the BEP remains the same as the current year, how much must the selling price be?
- Explain why the accountants view of breakeven is often criticised.
- Discuss how operational gearing affects a companys profits and give an example of how it can be increased.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Managerial Accounting Creating Value in a Dynamic Business Environment
Authors: Ronald W. Hilton
11th edition
125956956X, 978-1259569562
