QUESTION 1

A famous carpentry shop produces tables. A single unit (table) is sold at N$250.00. The variable cost of producing one table stands at N$220-00. The company incurs a fixed cost of N$400-00

Required:

a) Calculate the Contribution Margin?

b) How many units (tables) will the company need to produce to save it from making any loss, nor making any profit?

c) If the company wants to make a profit of N$30 000-00, how many units should be produced?

d) Draw a graph to indicate the break-even point, all costs and revenue?

e) If the company produces 4000 units (tables), what profit will it make?