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Draw and fully label the break-even chart for the business

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Reference no: EM132831104

Provision plc makes luxury hampers for sale in a chain of high-class department stores. The following financial information is available:

Wholesale price  $80 per hamper
Labour and material costs  $15 per hamper
Bought-in components  $25 per hamper
Overheads  $800,000 per year

Current output and sales are set at 30,000 hampers per year, though the firm has the capacity to produce 50,000 hampers per year.

Problem a) Calculate the break-even quantity for the firm.

Problem b) Draw and fully label the break-even chart for the business.

Problem c) Identify the margin of safety.

Problem d) Calculate the level of profit the firm is making.

Reference no: EM132831104

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