- 15 Marks
PM – Nov 2014 – L2 – Q5 – Cost-Volume-Profit (CVP) Analysis
Calculate break-even points for Colour-Effects Limited's products under various revenue mixes and sales scenarios.
Question
Colour-Effects Limited retails two products: Common and Executive traveling bags. The budgeted income statement for year 2015 is as follows:
Required:
(a) Calculate the break-even units, assuming that the planned revenue mix is maintained. (3 Marks)
(b) Determine the break-even point in units if only Common bags are sold and if only the Executive bags are sold. (6 Marks)
(c) Calculate the budgeted operating profit and break-even point if 200,000 units are sold, but only 20,000 are Executive bags. (6 Marks)
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