You have been asked to carry out an analysis of next years figures for two of the groups businesses to support decision-making. You are required to: Analyse breakeven data from the information about ABC Production Limited provided in Appendix 2. You should calculate breakeven and give an explanation of what this means for the business

ABC Production Ltd produces sports bags. Its costs and sales for the year ended 31 December were as follows: The selling price and all costs were at a constant rate throughout the year. To improve profit for the next year, the following changes are planned: (i) Units to be sold to increase by 10% (ii) Selling price to be maintained at the current price (iii) Wages to be increased by 3% per unit (iv) Material costs to be reduced by 5% per unit, this being achieved by changing from a local supplier to an overseas supplier (v) Variable overheads to be reduced by 0.45 per unit (vi) Fixed costs to increase by 7500 per annum ABC Production Ltd produces sports bags. Its costs and sales for the year ended 31 December were as follows: The selling price and all costs were at a constant rate throughout the year. To improve profit for the next year, the following changes are planned: (i) Units to be sold to increase by 10% (ii) Selling price to be maintained at the current price (iii) Wages to be increased by 3% per unit (iv) Material costs to be reduced by 5% per unit, this being achieved by changing from a local supplier to an overseas supplier (v) Variable overheads to be reduced by 0.45 per unit (vi) Fixed costs to increase by 7500 per annum