ANNE company ltd manufacture a beauty product, the costs and selling price of which are: Tshs Direct materials cost per unit 28,000 Direct labour cost per unit 12,000 Variable overheads cost per unit 8,000 Fixed overheads cost 120,000,000 Selling price per unit 72,000 These figures are based on an expected volume of production of 9,000 units.
a) Calculate t company’s contribution margin sales ratio.
b) Calculate company’s BEP in units and shillings c) The company’s expected margin of safety in units and shillings d) If the company wants to make profit of 60,000,000, how many units must be sold? e) It is now expected that variable overhead cost per unit and direct labour cost per unit will each increase by 10%, and fixed costs will rise by 15% how many units must be sold to achieve profit of 60,000,000?