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Find what is the new break-even point in sales revenue

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Reference no: EM132560605

XYZ Company manufactures a product called "PERMA". Pertinent cost and revenue data relating to the manufacture of this product is 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

Question 1: Calculate the break-even sales level in shillings;

Question 2: Suppose the company desires to make a profit of shs.195,000, what should be the output in units?

Question 3: 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?

Question 4: State five limitations of break-even analysis

Reference no: EM132560605

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