Answered step by step
Verified Expert Solution
Question
1 Approved Answer
QUESTION ONE A. POP limited is in the drinks manufacturing industry and has developed a new energy drink. To begin its mass production of the
QUESTION ONE A. POP limited is in the drinks manufacturing industry and has developed a new energy drink. To begin its mass production of the same drink, it needs to procure a machinery and equipment at cost of K1, 867,000.00POP wants to borrow this money from the bank but it tell the bank that it can start paying back the loan after it makes a profit equal to K93 350. The new equipment produces 1000 units per day. Also given that; the fixed cost is K994 000, the selling price is K9 and the variable cost is 58% of the selling price. Required: I. II. Find the number of unit POP limited has to produce to come out of a loss making situation [5 Marks] To make a profit of K150 000, how many units does it need to produce? [5 Marks] How many days will it take before it begins paying back the loan? [5 Marks] If the price is reduced by 25%, what quantity would POP limited need to produce to break-even? [5 Marks] III. IV
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started