The following was extracted from the standard cost card of Kafue Cement plc.Selling price 100kg pocket of cement K360Direct material cost per 100kg pocket of cement K50Direct labour cost per 100kg pocket of cement K50Variable production overhead per 100kg pocket of cement K29Other relevant cost information extracted from the budgets:Fixed production costs K9,750,000Fixed selling and distribution costs K3,456,000Sales commission 5% of selling priceSales 90,000 100kg pockets of cement.REQUIRED:1. Calculate the breakeven point both in sales volumes (number of pockets) and sales value.2. Calculate the margin of safety both in percentage and in volume.3. Suppose the selling price per pocket of cement was to be increased to K375 and the sales commissionincreased to 8% and a further K150,000 on advertising. Calculate the revised breakeven point sales volumebased on suggestion in (3) above and comment accordingly

Break-even point: The break-even point refers to a point where the total cost is equal to the total…

REQUIRED: 1. Calculate the breakeven point both in sales volumes (number of pockets) and sales value. 2. Calculate the margin of safety both in percentage and in volume. 3. Suppose the selling price per pocket of cement was to be increased to K375 and the sales commission increased to 8% and a further K150,000 on advertising. Calculate the revised breakeven point sales volume based on suggestion in (3) above and comment accordingly

REQUIRED: 1. Calculate the breakeven point both in sales volumes (number of pockets) and sales value. 2. Calculate the margin of safety both in percentage and in volume. 3. Suppose the selling price per pocket of cement was to be increased to K375 and the sales commission increased to 8% and a further K150,000 on advertising. Calculate the revised breakeven point sales volume based on suggestion in (3) above and comment accordingly

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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