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Question 05 : ( a ) What are the Limitations of Break - Even Analysis ? ( b ) Kenna Led manufactures a single product

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Question 05 : ( a ) What are the Limitations of Break - Even Analysis ? ( b ) Kenna Led manufactures a single product in a factory that is capable of producing* 50, 000 units per year . A budgeted Income Statement for the current year is shown below . Sales ( 50, 000 Units") 5.00, 000 Less , Cost of Goods Sold : Variable Manufacturing Cost 150, 000 Fixed Manufacturing Cost 160,000 310, 000 Gross Profit 190, 000 Less , Selling and Administrative EXPENSES ! Variable 50, 000 Fixed 20, 000 70, 000 Net profit 120, 000 Required : ( 1 ) Income statement showing contribution Margin ( 11 ) Calculate the break - even point ." a ) In Units b ) Sales Revenue

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