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Question 5 Stylo Ltd produces a special video tech product with the following annual data for next year: Required: SHOW YOUR WORKINGS FOR ALL SECTIONS

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Question 5 Stylo Ltd produces a special video tech product with the following annual data for next year: Required: SHOW YOUR WORKINGS FOR ALL SECTIONS a) How many units in total must be sold to break even? ( 1 mark) ANSWER a): b) Prepare a contribution margin income statement for next year when they expect to sell 1000 units. (1.5 marks) ANSWER b): c) What is the expected safety margin in units if it sells 1000 units next year? ( 1 mark) ANSWER Cl: d) Should management be concerned about the safety margin calculated in (b)? Explain your answer. ( 1.5 marks) e) What dollar sales will Stylo Ltd need to generate in order to realize a target profit of $600,000 ? ( 2 marks)

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