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QUESTION 2 Damoah manufactures and sells a product called DAWADAWA which has the following cost and selling price structure: GHS per unit GHS per unit
QUESTION 2 Damoah manufactures and sells a product called DAWADAWA which has the following cost and selling price structure: GHS per unit GHS per unit Selling price 150 Direct material 40 Direct Labour 25 Variable Overhead 35 Fixed Overhead 20 120 Profit per unit 30 The fixed overhead absorption rate is based on the normal capacity of 2,500 units per month. Assume that the same amount is spent each month on fixed overheads. Budgeted sales for the next month are 3,000 units. Required: Calculate a. The breakeven point in sales units and value b. The margin of safety for the next month in units and percentage (3 marks) (4 marks) c. Contribution to Sales Ratio d. The budgeted profit for the next month c. The sales required to achieve a targeted profit of 150,000 f. Illustrate the above information with a break-even chart (3 marks) (4 marks) (3 marks) (3 marks) (Total 20 marks)
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