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Question - A company plans to produce sell 120,000 units of its single product in the forthcoming period at a selling price of ksh15 per unit. Fixed overheads and net profit for the period are expected to be ksh440,000 and ksh520,000 respectively
Required -
1. Calculate the total variable costs per unit
breakeven point in units
margin of safety as a %
2. Revenue required to achieve a target profit of ksh800,000.
3. Discuss the shortcomings of breakeven analysis to a company.
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