FNPF CBA 2 Help!!

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Ogaufi
Ogaufi Registered Posts: 9 New contributor 🐸
Hello

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

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  • Terdoo
    Terdoo Registered Posts: 144 Dedicated contributor 🦉
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    Fnpf

    Hi
    The return on the additional investment is:

    Additional annual profit 1,900.000/3,000,000 = 63.33%
  • Ogaufi
    Ogaufi Registered Posts: 9 New contributor 🐸
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    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
    sdv Registered Posts: 585 Epic contributor 🐘
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    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%
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