QUESTION 2
Beta company sells blouses in kantamanto. The blouses are imported from Togo and are sold to
customers at Katamanto at a profit. Sales person are paid basic salary plus decent commission of
GHS 14 on each sale made by them. Selling price and expenses data is given below
Ghc
Selling Price
80
Variable:
Invoice Cost
36
Sales Commision
14
Total Variable Cost
50
Fixed Expenses:
Rent
160,000
Marketing
300,000
Salaries
140,000
Total Fixed Expenses
600.000
You are required;
a. Compute the break-even point in units and in cedis using the information given above
using the equation method.
b. Prepare a CVP graph (break-even chart) and show the break-even point on the graph, if the
company budgets to 20,000 blouses this year.
c. What would be the net operating income or loss if the company sells 18,500 blouses in a
year?
d. If the manager is paid a commission of GHS 6 blouse (in addition to the salesperson's
commission), what will be the effect on the company's break-even point?
e. What will be the break-even point of the company if commission is entirely eliminated and
salaries are increased to GHS 214,000?
