sold 5,000 units with the following results:
GH¢’000
Sales
22,500
Less : variable expenses:
13,500
Contribution margin Less: Fixed expenses Net income
You are required to:
9,000 6,300 2,700
i. ii.
iii.
Compute the break-even point in GH¢ and the margin of safety.
Calculate the contribution margin ratio and the break-even point in units if the variable
cost per unit increases by GH¢600? Also, calculate the selling price per unit if the company wishes to maintain the previous year’s contribution margin ratio.
[5 marks] The company is also considering the acquisition of a new automated plant.
