Question 1

You are given the following information:

Fixed costs per annum $60 000

Unit selling price $ 20

Unit variable cost $ 10

Existing sales 80 000 Units

Relevant range of output 4 000 12 000 Units

Calculate the following

1. Break-even point in units

2. Units to be sold to obtain a profit of $30 000

3. The net profit if fixed costs are reduced by $10 000 and there is a 10%reduction in variable cost
4. The selling price to be charged to show a profit of $30 000 on sales of 8 000 units

Additional sales volume to meet $8 000 additional fixed costs