Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following data relate to Kenya Ltd for the year ended 31 December 1999. Sh 000 Sales 24,000 Less: Total costs 20,000 Net profit 4,000

The following data relate to Kenya Ltd for the year ended 31 December 1999. Sh 000 Sales 24,000 Less: Total costs 20,000 Net profit 4,000 Fixed costs account for 40% of the total costs. Required: i) Margin of safety. ii) Break even point in sales iii) Sales required to earn profit of 6000000 iv) In order to increase sales, the management has the following two options: 1. To increase sales by 25% on incurring a sales promotion cost of Sh 2,500,000. 2. To increase sales by 15% on reducing selling price by 5%. Advise the management on which option they should take.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

International Financial Reporting and Analysis

Authors: David Alexander, Anne Britton, Ann Jorissen

5th edition

978-1408032282, 1408032287, 978-1408075012

More Books

Students also viewed these Accounting questions

Question

BPR always involves automation. Group of answer choices True False

Answered: 1 week ago

Question

Discuss the value of adult learning theory to HRD interventions

Answered: 1 week ago

Question

Conduct a task analysis for a job of your choosing

Answered: 1 week ago