Selling Price per unit24

Variable manufacturing cost12

Variable selling cost3

Fixed factory overhead60,000

Fixed selling overhead12,000

Required

a)Calculate the break-even point in units

(5 marks)

b)Calculate the sales units and revenue required for a profit of 90,000

(10 marks)

c)Explain the following concepts, using graphs:

1.Break-even analysis

2.Margin of safety(6 marks)

d)Explain the limitations and assumptions of break-even analysis