Accounting 9706 · AS & A Level · Costs and cost behaviour

Costs and cost behaviour — practice question

Rahel produces only product X and wants to find the break-even point.
(a)[1]

State the meaning of break-even point.

(b(i))[4]

Calculate the break-even point in units.

(b(ii))[4]

Calculate the break-even point in $ revenue.

(c)[4]

Prepare a break-even chart for product X.

(d(i))[4]

Calculate the margin of safety in units.

(d(ii))[4]

Calculate the margin of safety as a percentage.

(e)[2]

Calculate the contribution per unit of each product Y and Z.

(f)[1]

Calculate the forecast profit for the new factory for the month of April.

(g)[5]

Calculate the revised profit taking into account the limited direct labour hours.

(h)[5]

Advise Rahel which option she should choose. Justify your answer.

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