Q2. A&D Ltd. is in the manufacturing of wooden products and makes several wooden items. The following values are related to a particular wooden item:  Particulars   Selling price per unit SAR  1,100 Variable cost per unit SAR  400 Total fixed costs

Cornerstones of Cost Management (Cornerstones Series)
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ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
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Q2. A&D Ltd. is in the manufacturing of wooden products and makes several wooden items. The following values are related to a particular wooden item: 

Particulars

 

Selling price per unit

SAR  1,100

Variable cost per unit

SAR  400

Total fixed costs

SAR  500,000

Estimated next year’s budgeted sales

1,200 units

 

You are required to calculate:                                                                                                

  • BEP in units and BEP in sales SAR
  • Degree of operating leverage
  • Margin of safety in units
  • Margin of safety in SAR
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