The following information pertains to K & O Cos single product.

Selling price GH6

Variable production cost GH1.20

Variable selling cost GH0.40

Fixed production cost GH4

Fixed selling cost GH0.80

Budgeted production and sales for the year are 10,000 units.

REQUIRED:

1. Calculate K & O companys breakeven point, to the nearest whole unit.
2. How many units must be sold if K & O company wants to achieve a before- tax profit of GH11,000 for the year?
3. It is now expected that the variable production cost per unit and the selling price per unit will each increase by 10%, and fixed production costs will rise by 25%. What will be the new breakeven quantity and revenue for K & O company?