Question)

Bond Products Limited is a small single product firm. For the next period the following budget data are available:

Sales revenue (12,000 units)$720, 000

Total costs and expenses $ 708, 350

Taxes (at 40% tax rate) $ 4, 660

Budgeted Net Profit $ 6, 990

CVP analysis carried out for the above budget period shows a break even volume of 10,000 units.

Required:

Using the above information:

(i)Calculate the variable costs per unit

(ii)Calculate the fixed costs for the period

(iii)Construct a Contribution margin statement

(iv)Calculate unit contribution margin and contribution margin ratio.

(v)Using the $80.00 unit selling price, calculate the number of units that need to be sold to earn a net profit after tax equal to 4% of total costs and expenses.