a) Define break-even point. (3 marks)
b) The launch of a new product is being considered and four possible levels are being considred depending on consumer reaction. The variable costs associated with these levels are shown below:
Consumer reaction Adverse Average Good Excellent
Variable costs (pound 000) 20 30 45 70
There are fixed costs of pound 36000 and the contribution sales ratio is expected to be 60%.
Required:
Calculate
a) Profit on loss at each of the four levels. (8 marks)
b) Break -even point in sales value. (4 marks)
c) The level of sales at which a profit of pound 10000 would be made.( 5 marks)
For a custom-written paper on the above topic, place your order now!
What We Offer
• On-time delivery guarantee
• PhD-level professionals
• Automatic plagiarism check
• 100% money-back guarantee
• 100% Privacy and Confidentiality
• High Quality custom-written papers
