Question
QUESTION TWO Corin Company manufactures a product called Corfic. Pertinent cost and revenue data relating to the manufacture of this product are given below: Shs
QUESTION TWO Corin Company manufactures a product called Corfic. Pertinent cost and revenue data relating to the manufacture of this product are given below: Shs Selling price per unit 66 Variable production cost per unit 44 Variable selling cost per unit 4 Fixed production cost (total) Shs.200,000 Fixed selling and administrative cost (total) Shs.99,000 Required: a) Calculate the break-even sales level in shillings; (5 Marks) b) Suppose the company desires to make a profit of shs.195,000, what should be the output in units? (5 Marks) c) A new machine, which is more efficient, is installed. This machine increases the fixed production cost by 20% but reduces the variable production cost per unit by 30%. What is the new break-even point in sales revenue? (5 Marks)
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