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ZED plc manufactures one standard product which sells at 10. You are required: (a) to...

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Accounting

ZED plc manufactures one standard product which sells at 10.

You are required:

(a) to prepare, from the data given below, a graph showing the results for the six months ended 30 April and to determine

(i) the fixed costs;

(ii) the variable cost per unit;

(iii) the P/V ratio;

(iv) the break-even point;

(v) the margin of safety.

image

(b) to discuss the limitations of such a graph;

(c) to explain the use of the relevant range in such a graph.

MonthNovemberDecemberJanuaryFebruaryMarchAprilSales(units)30,00035,00015,00024,00026,00018,000Profit/(Loss)(L)40,00060,000(20,000)16,00024,000(8,000) MonthNovemberDecemberJanuaryFebruaryMarchAprilSales(units)30,00035,00015,00024,00026,00018,000Profit/(Loss)(L)40,00060,000(20,000)16,00024,000(8,000)

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