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Question 1:1 A firm plans to make and sell security systems for 500 each next year in a workshop with annual overheads of 411,000. (a)
Question 1:1 A firm plans to make and sell security systems for 500 each next year in a workshop with annual overheads of 411,000. (a) Using the costing data given in Table B1: (i) Sketch a CVP chart for the workshop up to 5,000 units (in steps of 1,000 units) with lines showing: Overheads, Total Costs and Sales Revenues. (ii) Calculate the Break-even Point (using Overheads / Product Contribution per unit) for the workshop and the Margin of Safety for the workshop given that Expected Sales are 4,400 units - show your workings. (b) If the Overheads increase by 40,000 : re-calculate the Break-even point and the Margin of Safety for the workshop and comment on the changes
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