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Tulongeni CC is a laptop bag producer in Namibia. Business has been performing well over the last year and they have thus decided to increase

Tulongeni CC is a laptop bag producer in Namibia. Business has been performing well over the last year and they have thus decided to increase their production. The new management has instructed a break-even analysis to assess the viability of the plan. Their expected sales turnover is 10 000 units with an envisaged selling price per unit of N$175; the Total fixed costs is N$550 000; Total Variable costs is N$ 500 000. Kindly use this Budget information to determine:

  1. The break-even point in units (3 marks)
  2. The break-even value (3 marks)
  3. The margin of safety (2 marks)
  4. Tulongeni CC wants to explore a new strategies to improve the breakeven point, all things being equal through a special discount of N$8.00 for every product purchased: what will the BEP in units be? (4 marks)

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