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Calculate the break-even sales level in shillings

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Reference no: EM132896060

PERMA manufactures product XYZ. Pertinent cost and revenue data relating to the manufacture of this product are given below:

Shs

Selling price per unit 66

Variable production cost per unit 44

Variable selling cost per unit 4

Fixed production cost (total) Shs.200,000

Fixed selling and administrative cost (total) Shs.99,000

Required:

a) Calculate the break-even sales level in shillings;

b) Suppose the company desires to make a profit of shs.195,000, what should be the output in units?

c) A new machine, which is more efficient, is installed. This machine increases the fixed production cost by 20% but reduces the variable production cost per unit by 30%. What is the new break-even point in sales revenue?

Reference no: EM132896060

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