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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.
(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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