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Question 1: Cost-Volume-Profit Analysis (Marks: 7+3+4+4=18) XYZ company sells its single product. The company's sales and expenses for the year 2021 are as follows: Description
Question 1: Cost-Volume-Profit Analysis (Marks: 7+3+4+4=18) XYZ company sells its single product. The company's sales and expenses for the year 2021 are as follows: Description Total Tk. Per Unit Tk. Sales (25,000 units @50) 1,250,000 50 Less: Variable Expenses 750,000 30 Contribution Margin 500,000 20 Less: Fixed Expenses 350,000 Net Operating Income 150,000 Requirements: i. Calculate the breakeven point in sales dollar and unit of sales. ii. Calculate the safety margin in percentage. iii. What is the amount of sales to be achieved to earn a net income of Tk. 250,000? iv. The product engineering team has come up with a new proposal that will allow the company to decrease the variable expenses by TK 5 per unit but will require an additional fixed expense of 50,000. Find out the number of units to be sold for achieving current level of target profit i.e. Taka 150,000. Show the necessary calculations
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