Required: (Present your answer to whole numbers)

1. Calculate the forecast profit for the coming year.

2. Calculate the breakeven point and the margin of safety at the expected level of sales, in both whole units and value.

3. What level of sales volume and value would be required to give a profit of 6,300,000?

1. Prepare a calculation to determine whether the central territory should be discontinued.

2. Comment on the result of (i).

3. Apart from the calculation in (i), outline the factors that could be relevant to the decision to close or continue one factory that is making losses.

PML plc makes a single product to which the following information applies - Selling price per unit 4,400 .Variable costs per unit Direct materials 6202 Direct labour 7804- Variable overheads 5002 . Fixed costs Manufacturing overheads 6,000,00044 Selling overheads Administration overheads 2,000,00042 3,500,00044 R Sales are forecast to be 74,000 units for the coming year. Assume the periodic profitability analysis of sales territories reports the following: Eastern Western Centrale Totale 0002 0002 000 000 Sales 2,400 2,7002 3,000 8,1002 Variable costs (686) (761) (1,985) (3,432) Fixed costs (520) (410) (1,040) (1,970) Profit/(Loss) 1,194 1,529 (25) 2,698 Assume that a special study indicates that 830,000 of Central fixed costs and all variable costs are avoidable and 210,000 fixed costs are unavoidable if the territory is discontinued. 4