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ZED Private Limited Corporation manufactures one standard product, which sells at $10 per unit. The following data are extracted for the six months period ending
ZED Private Limited Corporation manufactures one standard product, which sells at $10 per unit. The following data are extracted for the six months period ending 30 April: Month Budgeted Sales (units) November December January February March April 30,000 35,000 15.000 24,000 26,000 18,000 Budgeted Operating income/loss) ($) 40,000 60,000 (20,000) 16,000 24,000 (8,000) Required: a. Compute the budgeted variable cost per unit. b. Compute the budgeted fixed cost per month. c. Prepare a break-even and profit-volume graph showing the results for the six months period ending 30 April. In the graph, show: i. the break-even point in units and in dollar sales. ii. the margin of safety for the month of November in units and in dollar sales. d. Discuss the limitations of the graph in (a) above. e. Explain the use of the relevant range for the graph in (a) above
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