A prolongation commercial operation sells the single product. The physical education instructor is paid the bound salary. The workers have been paid the bound income as well as the capability prerogative – the some-more units constructed as well as sole the larger the prerogative by aloft pay. Last year the commercial operation constructed as well as sole 30,000 units. The commercial operation has following costs as well as revenue:
Per Unit interpretation for offered as well as prolongation bruise pound
Selling cost 45
Cost of product twenty-five
Productivity prerogative 2
27
Annual Total Expenses
Rent 75,000
Salaries 200,000
Advertising 95,000
Insurance (note 1) 50,000
Transport (note 2) 48,000
Other bound costs 30,000
Total Expenses
Note 1, the word costs have been almost bound as well as separate in to bound (70%) as well as non-static (30%) parts. The annual assign of 50,000 pounds is formed in 30,000 units produced.
Note 2, the ride costs have been semi-fixed as well as separate in to bound (50%) as well as non-static (50%) parts. The annual assign of 48,000 pounds is formed upon 30,000 units produced.
Required
a)Find the annual breakeven indicate as well as the domain of reserve in worth as well as in units, formed upon final year’s sales additionally weigh the distinction on all sides as well as risks the organisation will design if 40,000 units have been sole in the entrance year. How most units contingency be sole to strech the aim handling distinction of 150,000? (25 marks)
b) if the capability prerogative was dropped for workers as well as an additional 90,000 pounds paid instead in the form of bound salaries, would the on all sides of the commercial operation be improved? (8 marks)
Hello Jessie Geronimo,
Thank we for revelation me the answer, Could we discuss it me how to equate this question?
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a) 322,250
b) No