FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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B. Hygienics Co produces free-standing sanitiser units for domestic and commercial use. They produce a single product in a highly competitive market. They have gathered the following expected information for the year 2021:

£
Selling price (per unit)
Direct materials (per unit)
Direct labour (per unit) 155.00 60.25 30.50

Other costs are estimated for the year 2021 based on the expected sales of 62,000 units. These costs are given below:

Fixed Costs Variable Costs
Operating Costs 420,000 1,750,000
Marketing Costs 350,000 122,500
Storage Costs 570,000 101,000
Administration Costs 232,000 -

For the year 2021, you are required to calculate:

a) the expected profit or loss
b) breakeven point in units and sales revenue

c) margin of safety in units and % change

d) the profit/loss if the selling price is increased by 5% and sales quantity decreases by 50%
e) the revised break-even point in units for (d)

 

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