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please attempt this questions 3. Youvraj Ltd Youvraj Ltd has produced the following budget for the following year for each of its three divisions, each
please attempt this questions
3. Youvraj Ltd Youvraj Ltd has produced the following budget for the following year for each of its three divisions, each of which produces a single product: Division A 300 Division B 150 Division C 50 Sales units ('000) Selling price ( per unit) 20 25 10 Variable cost ( per unit) 12 15 5 500 300 200 Attributable fixed cost ('000) Attributable fixed costs are specific to each division and would be avoided if the division was discontinued. General fixed costs, which are budgeted to be 1m for the year, are to be apportioned to each division on the following basis: Division A Division B Division C 60% 30% 10% Required: a) Calculate the budgeted profit for Youvraj Ltd and for each of its three divisions, and present your answer in a form which is suitable for management. b) Calculate the break-even sales quantities for each division. c) Calculate the margin of safety for each division. d) Calculate the level of sales required by each division for each to achieve a level of 1m profits. e) Additional marketing and advertising of 50,000 is being considered for Division A over and above the amount included in the original budget above. Calculate the additional number of units Division A will need to sell in order to cover this additional marketing and advertising expenditure. f) Explain the main limitations of Cost Volume Profit (CVP) analysisStep by Step Solution
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