budgeted break-even point
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Free InquiryBoom Ltd sells two products, the ‘Crash’ and the ‘Bang’. Budgeted sales by product and in total for the coming month are shown below:
Crash |
Bang |
Total |
|
Percentage of total unit sales |
25% |
75% |
100% |
Sales volume (units) |
50,000 |
150,000 |
200,000 |
£ |
£ |
£ |
|
Sales |
1,000,000 |
1,800,000 |
2,800,000 |
Less variable expenses |
(600,000) |
(1,200,000) |
(1,800,000) |
Contribution |
400,000 |
600,000 |
1,000,000 |
Less fixed expenses |
(640,000) |
||
Profit |
360,000 |
You are required to:
a) Calculate the budgeted break-even point in units, and the margin of safety in %. (10 marks)
b) Calculate the unit sales required to achieve a profit of £500,000. (5 marks)
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