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Determine the contribution per unit of the product

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Question - Erora Macopy Nigeria Ltd deals with one product called "Feyikogbon".

The current sales = 2000 units at N200 each.

The costs are:

Direct Materials 114,000

Direct labour  36,000

Variable Overhead 40,000

Fixed Overhead 99,750

Required -

(a) Determine the contribution per unit of the product.

(b) Using your answer in (a) determine how many units the company must sell in order to break even.

(c) Calculate the additional sales in units required to maintain the current profit level, if the selling price is reduced by 5 percent.

(d) Calculate the net profit if the sales volume (in units) is increased by 10 percent.

(e) If the fixed cost increases by N20,000, how many units should be sold in order to earn a profit of N60,000?

 

Reference no: EM132597865

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