ESTIMATING COSTS AND REVENUES — CVP ANALYSIS ‘The following information relates to questions 79 and 80. A business sells a single product at a selling price of $40 with a contribution to sales ratio of 30%. The fixed costs for the period are $210,000. 62 Howmany units must be sold to break even? A 15,750units 8 17,500units © 63,000 units 700,000 units 63 Ifthe business wishes to make a profit of $60,000 how many units must be sold? A 9,643 units B 22,500 units © 81,000 units 900,000 units 64 Tindall Ltd cells 2 single product for $40 per unit. Fixed costs are $48,000 and variable costs 80% of revenue, If fixed costs increase by $8,000 the break-even number of units will increase by: A 10,000 units B 5,000 units © 1,000 units D— 200units“7 A company manufactures and sells 2 single product. The following data have been ‘extracted from the current year's budget Sales and production (units) 5,000 Variable production and distribution cost per unit $50 ined cost per unit $70 PAV (contribution margin) ratio 73% ‘The selling price per unit for next year is budgeted to increase by 8%, whereas both the variable production and distribution cost per unit and the total fixed casts are expected to Increase by 12%. ‘The objective for next year is that the total budgeted profit should remain the same as that budgeted for the current year. ‘What is the minimum number of units which should be produced and sold next year in ‘order to achieve the objective? A 4688 B 4.950 © 5209 D 5,280 ‘A company which makes a single product has a contribution to sales ratio of 30%, Each unit is sold at $8. Ina period when fixed costs were $30,000 the net profit was $56,400. ‘What was the total of direct wages for the period if direct wages were 20% of variable costs? A $17,280 B $26,400 © $40,320 D $57,600 Hill Ltd sels a single product. In the coming month, itis budgeted that this product will generate a total revenue of $300,000 with a contribution of $125,000. Fixed costs are budgeted at $100,000 for the month. ‘What is the margin of safety? A O% B 10% 20% D 25%Profit/volume A company has the following summary results for two trading periods: Period 1 Period 2 S000 $000 Sales 7007 794.4 Variable costs 408.3 408.0 Contribution 3344 385.1 Fined casts 2978 207 Net profit, 366 pa What would be (to the nearest $000) the sales required in Period 2 to achieve the same net profit as Period 1, A $794,000 8 $742,000 © $720,000 D $080,000