State the meaning of the term ‘break-even point’.
State three applications of marginal costing.
Suggest a reason for the fall in the direct material price.
Suggest a reason for the rise in the direct labour rate.
Explain why fixed costs may rise by $50\%$.
Calculate the yearly profit if the expansion were to go ahead.
Calculate the profit per unit if the expansion were to go ahead.
Calculate the contribution-to-sales ratio if the expansion were to go ahead.
Calculate the revised break-even point. Give your answer in both revenue and units.
Explain how the suggested factory expansion might change shareholders’ opinions about how safe their investment is.
Advise the directors whether they should go ahead with the factory expansion. Support your answer with reasons.