Calculate the budgeted contribution per unit for the product.
Calculate the margin of safety, in units, for the budgeted figures.
Calculate the budgeted margin of safety expressed as a percentage.
Prepare calculations for the following in the first year if the directors choose to go ahead with this plan: (i) the revised budgeted contribution.
Prepare calculations for the following in the first year if the directors choose to go ahead with this plan: (ii) the revised budgeted total profit.
Advise the directors on whether they ought to accept the sales manager’s plan. Support your answer with both financial and non-financial factors, together with any relevant calculations.
State three assumptions that apply when using cost-volume-profit (CVP) analysis.
State two advantages of CVP analysis.