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The following information relates to a company, which produces a single product. Direct $ 22 labour per $ 12 unit Direct materials per unit Variable
The following information relates to a company, which produces a single product. Direct $ 22 labour per $ 12 unit Direct materials per unit Variable overheads $ 6 per unit Fixed costs Selling price per unit $ 400,000 $ 60 1. Define the term 'break-even. 2. Explain why break-even analysis is of reduced value to a multi-product firm? 3. Use the figures above to construct a break-even chart showing the minimum number of units that must be sold for the company to break even. Fully label your diagram. 4. Analyse the factors that any business should take into consideration before using break-even analysis as a basis for decision making
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