Question four

The following table has been prepared using figures from the management accounting system of ME Ltd for the just ended quarter of 2019. The quantity in units is in the relevant range which is from 0 units to 100,000 units.

Quantity (units)	0	1,000	20,000	50,000	80,000	100,000
Revenue (K million)				8
Variable cost (K million)			2.4
Fixed cost (K million)	3
Profit (K million)

Required

1. Fill in the blanks in the table.

(5 marks)

2. Calculate the breakeven point in units and in Kwacha.

(8 marks)

3. If the company wishes to earn a profit of K15, 000,000 how much should it produce and sell?

(7 marks)

4. If the margin of safety in units is 12,000 units, at what level is the ME Ltd operating? Calculate the profit at this level

(5 marks)

(Total 25 marks)