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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › question

  • This topic has 1 reply, 2 voices, and was last updated 1 year ago by John Moffat.
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  • June 26, 2021 at 11:15 pm #626408
    xyzc
    • Topics: 248
    • Replies: 59
    • ☆☆☆

    A company manufactures and sells a single product. When sales per month are 6.8 million, total costs are 6.56 million. When sales per month are 5.2 million total costs are 5.44 million. There is a step cost increase of 400000 in fixed costs when sales are 6.0 million but variable unit costs are constant at all levels of output and sales.
    What is the breakeven point for sales revenue per month?
    How to separate the fixed costs and variable costs here. How to calculate the fixed costs variable costs and contribution per unit whilst there is no sales volume given.

    June 27, 2021 at 8:23 am #626434
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 49598
    • ☆☆☆☆☆

    It is the normal high-low approach but instead of calculating the variable cost per unit we calculate it as a cost per $ of revenue.

    Surely you have a printed answer to this question?

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