Question 4

Ababio Plastic Company produces plastic buckets which are distributed all over the country. During the years 2009 and 2010, the following data were extracted:

Sales (GHS) Profits (GHS)

Year 2009 1,200,000 80, 000

Year 2010 1,400, 000 130, 000

You are required to calculate the following

a) Profit-Volume Ratio

b) Break-even point in sale value

c) Profit when the sales value is GHS1,800,000

d) The sales value required to make a profit of GHS120,000

e) The margin of safety in the year 2010