Hardaker Limited produces and sells two products. Product A sells for £12 per unit and has a total variable cost of £7.90, while for £17 per unit and has a total variable cost of £11.20. For every 4 units of Product A sold, three of product B are sold. Hardaker Limited fixed costs are £131,820 per period. Budgeted sales revenue for the next period is £398,500. Required: (a) Calculate the Breakeven points in Units. b) Calculate the Margin of Safety in Units (c) Evaluate the relevance of Break-Even Analysis in the modern manufacturing environment.
Hardaker Limited produces and sells two products. Product A sells for £12 per unit and has a total variable cost of £7.90, while for £17 per unit and has a total variable cost of £11.20. For every 4 units of Product A sold, three of product B are sold. Hardaker Limited fixed costs are £131,820 per period. Budgeted sales revenue for the next period is £398,500. Required: (a) Calculate the Breakeven points in Units. b) Calculate the Margin of Safety in Units (c) Evaluate the relevance of Break-Even Analysis in the modern manufacturing environment.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter7: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 47E: Klamath Company produces a single product. The projected income statement for the coming year is as...
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Hardaker Limited produces and sells two products.
Product A sells for £12 per unit and has a total variable cost of £7.90, while for £17 per unit and has a total variable cost of £11.20.
For every 4 units of Product A sold, three of product B are sold. Hardaker Limited fixed costs are £131,820 per period. Budgeted sales revenue for the next period is £398,500.
Required:
(a) Calculate the Breakeven points in Units.
b) Calculate the Margin of Safety in Units
(c) Evaluate the relevance of Break-Even Analysis in the modern manufacturing environment.
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