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CVP analysis and short term decision question

Forums › FIA Forums › MA2 Managing Costs and Finance Forums › CVP analysis and short term decision question

  • This topic has 2 replies, 2 voices, and was last updated 1 year ago by Ken Garrett.
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    Posts
  • September 19, 2021 at 3:24 pm #636019
    khulan2002
    Member
    • Topics: 13
    • Replies: 6
    • ☆

    The budgeted data of a company is given below.

    Per unit ($)
    Material 36
    Labour 22
    VOH 20
    Selling price 120
    Budgeted production and sales are 5,000 units and fixed costs are $60,000.

    1. What is the break-even point?
    2. What is the total profit?
    3. What is the margin of safety?

    September 20, 2021 at 6:15 am #636032
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10197
    • ☆☆☆☆☆

    Contribution per unit = 120 – 36 – 22 – 20 = 42.

    You should be able to solve these basic questions easily if you read Chapter 8 of our MA2 notes.

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