Question 3

a. Consider the following information for a given business. Sales revenue GHS 40,000

VC per unit = GHS 20

Activity level = 1,000 to break even

Required:

i.Determine the TFC.

ii.Express the contribution as a percentage of sales.

iii.The company plans to sell 1,500 units in the next period. What will be the percentage Margin of Safety (MoS)?

iv.What margin should the business employ for planning purposes?

v.What total profit should the business expect in order to achieve its planned sales?