Edwards & co manaufactures teddy bears. The company's bears are in demand all year round and in the next financial year the sales manager plans to sell 12,00 teddies. The trainees management accountant has provided the following cost information for 1 unit of teddy bear. The selling is £10.00 and the variable cost will consist of direct, materials £1 .00 per unit, direct labout £5.00 per unit. The fixed cost for the year are expected to be £32,000. Required: Calculate contribution per unit The breakeven point in units The breakeven points in terms of sales value The level of sales quanity to reach a target profit of £20,000

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.