Calculate the budgeted fixed costs for the year ending 31 December 2018.
Calculate the budgeted number of units to be sold for the year ending 31 December 2018.
Calculate the budgeted contribution to sales (C/S) ratio (to two decimal places).
State what C/S ratio means.
State the term for the difference between the budgeted total sales units and the budgeted break-even sales units.
Explain why this difference matters to a business.
Draw the break-even chart for Ken using the relevant data. Make sure the profit area, the loss area and the break-even point are all clearly marked.
State three limitations of break-even analysis.
Calculate how many units Ken must sell each month so that the budgeted total contribution matches the 2018 figure.
Advise Ken whether he should raise the selling price, using both financial and non-financial factors.