Business, 04.08.2021 21:40 roxanneee2145
Alpha Company has produced the following budget. The company produces and sells one product only. GHSGHSSale32,000Direct Material 11,400Direct Labor6,000Overheads12,80030,200Prof its1,800Material cost are totally variable but labor and overhead are semi-variable. The fixed element of the above labor cost is GHS 1,600 and the fixed element of the overhead cost is GHS5,600. The unit selling price is GHS80. In order to develop sales the company plans next year to reduce the selling price of each unit by 5% this should increase the volume sold by 25%. For next year, fixed costs in total are expected to increase by GHS200.Required. a.Present a statement showing contribution per unit and in total. b.Calculate the present break-even point. c.Calculate the present margin of safety. d.Calculate the break-even point if the changes outlined above on selling price and quality are introduced next year. e.Advise on whether or not the price changes should be implemented.
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Alpha Company has produced the following budget. The company produces and sells one product only. GH...
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