A U Ltd manufactures and sells a single product, the company's sales and expenses for the month of January 2021 were as follows: Total (Kshs) Value per unit (Kshs) Sales 1.200.00 80.00 Less: Variable expenses 840.00 56.00 Contribution 360.00 24.00 Less: Fixed expenses 300.00 Net income 60.00 Required: What is the monthly breakeven point in units and in shillings? What is the total contribution margin at breakeven point? How many units would be sold each month to carn a minimum target net income of kshs. 36.000?
A U Ltd manufactures and sells a single product, the company's sales and expenses for the month of January 2021 were as follows: Total (Kshs) Value per unit (Kshs) Sales 1.200.00 80.00 Less: Variable expenses 840.00 56.00 Contribution 360.00 24.00 Less: Fixed expenses 300.00 Net income 60.00 Required: What is the monthly breakeven point in units and in shillings? What is the total contribution margin at breakeven point? How many units would be sold each month to carn a minimum target net income of kshs. 36.000?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
A U Ltd manufactures and sells a single product, the company's sales and expenses for the
month of January 2021 were as follows:
Total (Kshs)
Value per unit (Kshs)
Sales
1.200.00
80.00
Less: Variable expenses
840.00
56.00
Contribution
360.00
24.00
Less: Fixed expenses
300.00
Net income
60.00
Required:
What is the monthly breakeven point in units and in shillings?
What is the total contribution margin at breakeven point?
How many units would be sold each month to carn a minimum target net income of
kshs. 36.000?
(iv)Using the original data, compute a company's margin of safety in both shilling and in percentage terms
What is the contribution margin ratio, if the monthly sales increase by Kshs 16,000?
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