You have the following information:
Selling price per unit: $20
Raw materials cost per unit: $10
Variable labour cost per unit: $2
Fixed production costs: $42,000
Required - Type answers to the following in the space provided:
1) What is the break-even point? (3 marks)
2) What is the break-even sales dollar value? (3 marks)
3) If you want a profit of $28,000 how many units need to be sold? (4 marks)
4) Currently, production and sales information for the year are as follows;
Maximum production capacity of the warehouse: 25,000 units
Current production capacity: 20,000 units
You have been approached for a special order of 10,000 units at a price of $15 per. Should you accept the special order. Show all workings. (10 marks)