Question

Question 3 8 A Company manufactures and sells one product. The product Selling price Per UiTAED) 60 Variable cose PerUnit D 3 5 Total fedexpers per month are as follows Express type AED Advertising 2 0,000 100,000 Municipality for 5000 Select the con c ed The company proud and sold 10.000 unts during the month and had to be What is the reveren ? How many units would the comporteve to sell to have a proof AED120.000 se by 200 by how much should the n correct answers for the below questions from the A AED 540,000 B.140,000 UNITS CAED 30,000 D. 110.000 UNITS 13.00 UNITS AFD 5.000 AD 110000 HAED 629.223 111558 UNITS ALD 3.000

Answer 1

1. A. 540,000 AED

For the break even revenue

Revenue=costs

Let X be the number of units

60X=35X+20,000+100,000+100,000+5,000

25X=225,000

X=9000

Therefore the breakeven revenue=60*9000=540,000 AED

2. E. 13800 units

For profits to be 120,000

Revenue=Costs+120,000

60X=35X+225,000+120,000

25X=345,000

X=13,800 units

Therefore 13800 units will need to be sold for a profit of 120,000 units.

3. F. AED 5000

If the number of units increases by 200

The revenue will increase by 60*200=12000

The costs will increase by 35*200=7000 (Fixed costs are constant)

Therefore the operating income(profits) will increase by 12000-7000=5000 AED

Hope it helps. Do ask for any clarifications required.