Your organization produces and sell a single product and you are required to do a monthly cost-volume-profit analysis of this product. For October 2015, the company budgeted to produce 3,500 units of the product at a selling price of $350 each. The following cost information relating to the product was made available to you:

Cost per unit

$

Direct labour 80

Direct materials 70

Variable production overheads 60

210

Fixed production overheads 80

Total 290

Required:

(a) Determine the budgeted fixed cost associated with production for October 2015.

(2 marks)

(b) Calculate the break-even point in units and sales revenue. (6 marks)

(c) Express the break-even point as a percentage of the budgeted sales. (2 marks)

(d) Determine the margin of safety and explain the result that you get. (3 marks)

(e) Calculate the budgeted profit for October 2015. (6 marks)

(f) If the company wanted to make a profit of $420,000. What would the new selling price be? (6 marks)