FNPF CBA 2 Help!!

Ogaufi

Hello

I'm doing this assessment practice and i'm struggling with task 1.7 part b. Someone please help...

Terdoo

Fnpf

Hi
The return on the additional investment is:

Additional annual profit 1,900.000/3,000,000 = 63.33%

Ogaufi

Hi Terdoo
I don't mean that one, i mean the second practice assessment task 1.7. the question is too long to type out plus the info is in the table...i think...pls help!!

sdv

to work out contribution per unit

figures in .........................................£000

sales............................................. £4,000
less variable costs
material plus labour .........................£1,600

total contribution ............................£2,400

units produced ...............................,,,100

Contribution per unit (2400/100)...........£24

To workout breakeven points in units

= Fixed costs divide by contribution per unit

Fixed costs ..(1200+300+250),,,.....,£1,750

BEP = £1,750 / £24 = 72,917 units

to work out Margin of safety

100 - Divide BEP (units) by Activity (Units) times 100

100 - (72,917 / 100,000 x 100) = 27.08%