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TWO A company produces and sells a single product which has the following cost and selling prices structure GH/unit GH/unit Selling price 60 Direct material
TWO A company produces and sells a single product which has the following cost and selling prices structure GH/unit GH/unit Selling price 60 Direct material Direct labour Variable overheads 7 Fixed overheads =86 11 18 42 Profit per unit 18 The fixed overheads absorption rate is based on the normal capacity of 1,000 units per month. Assume that the same amount is spent each month on fixed overheads. Budgeted sales for next month are 1,100 units. Required a. Calculate the breakeven point in sale unit and in value per month b. Calculate the margin of safety for next month c. Calculate the budgeted profit for next month d. Calculate the sales level required to achieve a profit margin of 25% after tax of 30% e. Prepare a profit statement based on the output level determine in (d) above
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