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Question:
The following data are obtained from the record of a factory:
£ £ Sales 4,000 units @ £25 each 100,000 Materials consumed 40,000 Labour charges 20,000 Variable overheads 10,000 Fixed overheads 18,000 88,000 Net Profit 12,000
Calculate:
(i) The number of units by selling which the company will neither lose nor gain anything.
(ii) The sales needed to earn a profit of 20% on sales.
(iii) The extra units which should be sold to obtain the present profit if it is proposed to reduce the selling price by 20% and 25%.
(iv) The selling price to be fixed to bring down its break-even point to 544 units under present conditions.
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