Reference no: EM133163712
Question - Ballard Ltd manufactures a single product (PRx12). Unit cost and revenue data for the product is provided below.
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£
|
|
Selling price
|
43.80
|
|
Variable costs
|
25.20
|
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Contribution
|
18.60
|
Fixed costs are £185,780 per month.
The currently level of activity is 12,000 units per month. This activity level represents 80% of current production capacity.
Required -
1. Calculate the contribution / sales ratio (C/S %).
2. Calculate the product break - even point (in units and £s sales)
3. Calculate the level of sales (in units and £s) required to produced profits of £12,000.
4. Calculate the current margin of safety (in units and £s).
5. Calculate the current production capacity (in units).
6. Calculate the selling price of the spare capacity required to produce total profits of £40,000.