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The following information regarding planned July 2020 sales and costs was extracted from the books of LM Enterprises. Units 12,000 Sales Fixed costs Variable costs
The following information regarding planned July 2020 sales and costs was extracted from the books of LM Enterprises. Units 12,000 Sales Fixed costs Variable costs RMe 90,000 35,000 48,000 12,000 Find: a. Price per unit (2 marks) b. Variable cost per unit (2 marks) C. The breakeven point in units (3 marks) d. The breakeven point in RM (2 marks) e. The margin of safety (2 marks) f. The sales required to generate a profit of RM14,000 (3 marks) g. Tim, the sales manager, comments that when he compared the projected breakeven sales with the real numbers, sometimes a greater number of units were required to break even, especially in the months where demand was low and he had to work hard to push sales. Linda, the acquisitions manager who oversees the purchases of inventory, mentions that sometimes fewer than the projected units were needed to reach the breakeven point, especially when demand was high and sales exceeded expectations. Prepare a brief report of about 200-300 words, that explains the observations of Tim and Linda. Hint: Consider the limitations of ratio analysis (6 marks)
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