- 14 Marks
MI – Nov 2021 – L1 – SB – Q3a – Cost-Volume-Profit (CVP) Analysis
Calculate break-even point, contribution/sales ratio, sales value at break-even, and units to achieve profit.
Question
PQRS is a manufacturing company in Abuja producing a single product called QR. The selling price of the product is ₦250 with a marginal cost of ₦160, while the fixed cost is ₦1,800,000 per annum.
You are required to calculate:
- Number of units to break even (2 Marks)
- Contribution/Sales ratio (2 Marks)
- Sales value at breakeven point (2 Marks)
- Number of units to be sold to achieve a profit of ₦450,000 (2 Marks)
- At a margin of safety of 50%, prepare a statement using the profit to be achieved (6 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: Break-even Analysis, Contribution Ratio, Profit Target
- Level: Level 1
- Topic: Cost-Volume-Profit (CVP) Analysis
- Series: NOV 2021
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