You are given the following data for the coming year of a factory:

Budgeted output 200,000 units Fixed expenses 400,000 Variable expenses per unit 360 Selling price per unit 600

Required: a. Draw a break-even chart showing the break-even point.

b. Sandra plans to sell 4,000 mowers at 1,800 each in the coming year. Sandra has unit variable cost of E700 and fixed cost of 180,000. Required: 1. Calculated break even in units. 2. Calculate the margin of safety for Sandra in terms of the number of units. 3. Calculate the margin of safety for Sandra in terms of sales revenue.

c. Briefly explain the features of an effective budgeting.

d. What are the limitations of budgeting?