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Question A2 The Big Bottle Ltd. are a company which make and bottle fruit juice. Below is an extract from the company's account for the
Question A2 The Big Bottle Ltd. are a company which make and bottle fruit juice. Below is an extract from the company's account for the year ending 31st December 2020. The cost and sales relationship for the coming year are expected to follow the same pattern as in the preceding year. Sales (1.25 per bottle) Variable costs Fixed costs 1,250,000 430,000 280,000 For the coming year, year ending 31st December 2021 The Big Bottle Ltd. are budgeted to sell 350,000 bottles (a) What is the break-even point in sales value and units) round to the nearest bottle? (b) Calculate the C/S ratio for the year ending and 31st December 2020. What is the budgeted margin of safety for the year ending 31st December 2021? (expressed as a percentage) (d) List TWO limitations of break-even analysis
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