FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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UNES bookshop, Mombasa Campus started selling a book which students are required to buy during the 2014/2015 academic year. By then, the current manager of the bookshop had not come. While perusing through the books of accounts, he stumbles upon the following information that were prepared by the previous manager

Academic year

profit

sales

Variable cost

2014/2015

30,000

160,000

80,000

2015/2016

70,000

240,000

120,000

 

Assume that the unit price, unit variable cost and fixed cost are the same for the two academic years. Required

  1. . Determine fixed costs
  2. Compute the book’s breakeven sales revenue.
  3. What profit will the bookshop make if sales for the book are worth sh. 1,200,000?
  4. Assuming bookshop wants to make a profit of sh. 400,000, what sales will it need to make? V. Determine the profit that the bookshop will make if it incurs variable costs totaling sh. 470,000
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