Mr Gallagher is commencing in business to produce a single article which it sells at ?/?100.? He estimates that the marginal cost of production is ?/?60, while his fixed costs will be ?/?4,000 per month.? He has asked for your assistance with some calculations to inform his business plan.?? ?
(a) Calculate the projected profit/(loss) for the month for sales of:? ?
?- 500 units;?? – 200 units and? -?? 50 units.?????????? 3 Marks (b) Calculate the Sales Revenue required to earn a projected profit of ?/?5,000.??? 3 Marks (c) Calculate the projected profits at sales of ?/?30,000.???? 3 Marks (d) Calculate the margin of safety in value terms and units for sales of 400 units.? 3 Marks (e) Calculate a projected breakeven point if the sales price is reduced by 10%.?? 3 Marks (f) Discuss the advantages and disadvantages of using Break Even analysis.?? 5 Marks