Brecht Ltd produces a standard product which is sold for £85 each. The business incurred variable costs of £550,000 last year and total costs were £850,000. The business sold 11,000 units during the year and was operating at full capacity. The business intends to expand its output. This will involve building a factory extension, which will increase annual foced costs by £120,000 per year. 1. Calculate the number of products that need to be sold in order for the business to break even, after the new factory extension has been built. 2. Calculate the profit (loss) that would be generated if the business sold 10,000 units ) before the factory extension is built. (i) after the factory extension is built. (Losses should be shown in brackets.) 1. The new break-even point =units (Round up your answer to the nearest whole number.) 2. (0) The expected level of profit (loss) at 10,000 units output before the factory extension £ (Round up your answer to the nearest pound.) (i) The expected level of profit (loss) at 10,000 units output after the factory extension f (Round up your answer to the nearest pound.)

Brecht Ltd produces a standard product which is sold for £85 each. The business incurred variable costs of £550,000 last year and total costs were £850,000. The business sold 11,000 units during the year and was operating at full capacity. The business intends to expand its output. This will involve building a factory extension, which will increase annual foced costs by £120,000 per year. 1. Calculate the number of products that need to be sold in order for the business to break even, after the new factory extension has been built. 2. Calculate the profit (loss) that would be generated if the business sold 10,000 units ) before the factory extension is built. (i) after the factory extension is built. (Losses should be shown in brackets.) 1. The new break-even point =units (Round up your answer to the nearest whole number.) 2. (0) The expected level of profit (loss) at 10,000 units output before the factory extension £ (Round up your answer to the nearest pound.) (i) The expected level of profit (loss) at 10,000 units output after the factory extension f (Round up your answer to the nearest pound.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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