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Q3. A&T Company makes a product that sells for SAR 300 per unit. The other...

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Accounting

Q3. A&T Company makes a product that sells for SAR 300 per unit. The other details related to this product are as follows: (4 Marks)

Variable costs = SAR 60 per unit

Fixed costs = SAR 144,000

You are required to calculate:

  1. Contribution margin per unit and contribution margin ratio.
  2. Break-even point in units and sales SAR.
  3. Pretax profit if the company sells 1200 units.
  4. Units needed to reach target pretax profit of SAR 120,000.
  5. Sales SAR needed to reach the target pretax profit of SAR 120,000.
  6. The margin of safety in units for budgeted next years sales at 1,800 units.
  7. The margin of safety in SAR for budgeted next years sales at 1,800 units.

(Chapter 3)

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