Question

QUESTION 2 Fitzgerid kimited produces and sello a single product. Budgeted results for that product, for the year ended 31 December 2012, are shown belsus: Budgeted sales 10,000 units f f 2,000,000 800,000 Sales Direct Materials Direct Labour Fixed overheads Total Costs Total profit 400, ooo 50,000 1 700.20 300,00

Answer 1

a profit statement saler are 1200 units sales 12000 x 200 E 24000 Len Diki makna 800000 x 12000): 950ooo 10000 Direct labour 40oC 400000 >12000) (0,005 fined overhead 500000 Profil € 4, 60,000 52 Break even point 1 Break even powd - Fixed cost PV ratio PU rano a contribution & ico sales sales - Variate cast X100 calor 2,600.00 - 1200000 00 2,000,000 40% Break even 500,000 40% E 1250.000 margin of safety (7) = Sales - Break con cales xloo sates 2.000.000 - 1250 O Co. xo 2,000,000 37.5%

Se tumes c) Renisd Break even ( wage increanes labor cost by 20% Labour Col 400000 looco E 40 s increar by 20% £40 + 20% of 40 -648 pr ratio -sales variable cost X Sales 2,000,000 - poco - (10,0 corus) 2.000 OCO 5 2,000 - $100 pro A DOO *loo 2,000,000 136/ Break even np. Fixed cost PV ratio 5000 36% f 1388888.88 d) To maintain Rr und will w profit of 500,000! selling price, het t'be solling price sales -varable cost - Fixed cost & profit 10,000 () 2600,000 - 800,00 HDOD 0 800,000 - 40000 - SOO000+ 500000 10000 12209000 la 220 Selling price per und £220

Limitations of Break event analyss. 1) It is difficult to separate.' Fited' and vanable costs clearly There are some semi variables Cests. They are not Considered des analyses 22 are 3 apportioned an asmates over recovery since vanabe overheads bas problem. & under or cannot be eliminated.