Question
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
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