Use the following information supplied by Julie Carter to complete the table
and answer the questions that follow.
Total fixed costs £12,000
Variable costs per unit:
materials £7
wages £5 £12
Selling price per unit £20
Units of Fixed Variable Total Sales Profit
output costs costs costs revenue (loss)
£ £ £ £ £
0
500
1,000
1,500
2,000
2,500
3,000
(a) What is the break-even point in units and sales revenue?
(b) What is the margin of safety (in units and sales revenue) at an output of
2,000 units?
(c) How much is the profit when 3,000 units are produced?
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