QUESTION $3$

A company makes and sells three products, A$,$ B and C$.$ Unit costs and selling prices are as

follows:

A B C

Per unit $ $ $

Selling price $705080$

Variable costs $201050$

Fixed costs are $$175,000$ per month.

Sales vary between a maximum of $2,000$ units and a minimum of $1,500$ units per month of each

product.

REQUIRED

$($a$)$ Calculate the contribution to sales $($CS$)$ ratio for each product. $(71\mathrm{.}43\%/80\%/37\mathrm{.}5\%)$

$($b$)$ Calculate the company's monthly profit or loss on sales of

$($i$)2,000$ units per month of each product. $($$$65,000$ profit$)$

$($ii$)1,500$ units per month of each product. $($$$5,000$ profit$)$

$($c$)$ Assuming that monthly sales will be $1,660$ units of A and $1,700$ units of B$,$ calculate the

number of units of C$,$ which would need to be sold

$($i$)$ to achieve break even $(800$ units$)$

$($ii$)$ to achieve a target profit of $$30,000.(1,800$ units$)$