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Break even analysis

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The Varihary Company manufactures 2 products, Sintax and Gremmer, which sell for $10 and $ 15 respectively.

The following Figures apply to the year ended 30 September 2002.

Sintax Gremmer.
Sales $90 000 $30 000
Variable costs per unit $ 6 $ 12

Fixed costs for the company amounted to $ 10 000.

(a) Calculate the number of units of Sintax and Gremmer sold during the year ended 30 September 2002.
(b) Calculate the contribution to sales ratio for each product for the year ended 30 September 2002.
(c) Calculate the contribution to sales ratio for the company for the year ended 30 September 2002.
(d) From the following profit/volume chart for the company for the year ended 30 September 2002 determine the break-even point ,the profit or loss at the present sales figure and the profit or loss at sales of $ 20 000.Indicate clearly whether these are profit or losses.
For the year ended 30 September 2003 the company expects to increase total sales revenue by 10 %, half of the total increase to apply to each product. Unit prices and costs will be unchanged, and fixed costs will remain at $ 10 000.
(e) Calculate the number of units of Gremmer and Sintax which the company expects to sell during the year ending 30 September 2003.
(f) Calculate the contribution to sales ratio for the company for the year ending 30 September 2003.
(g) Draw a profit Volume chart for the company for year ended 30 September 2003, showing break-even point, and profit or loss at the expected sales figure and at sales of $6000.

Please see attached for full question.

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Solution Summary

Answers questions on break even analysis that determines the sales ration, break even point and profit volume chart.

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See attached file (at the end of the file I have drawn the graph).

The Varihary Company manufactures 2 products, Sintax and Gremmer, which sell for $10 and $ 15 respectively.

The following Figures apply to the year ended 30 September 2002.

Sintax Gremmer.

Sales $90 000 $30 000
Variable costs per unit $ 6 $ 12

Fixed costs for the company amounted to $ 10 000.

(a) Calculate the number of units of Sintax and Gremmer sold during the year ended 30 September 2002.

Answer
Sintax 90 000/10 = 9000

Gremmer 30 000/15 = 2000

(b) Calculate the contribution to sales ration for each product for the year ended 30 September 2002.

Answer

Sintex 10-6 ...

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