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Question 4d
Formulae & Tables
ACCA PM (F5) Formulae Sheet
You will get this Formula Table at the exam so learn well how to apply it in your ACCA PM (F5) Exam
Cardio Co manufactures three types of fitness equipment: treadmills (T), cross trainers (C) and rowing machines (R). The budgeted sales prices and volumes for the next year are as follows:
The standard cost card for each product is shown below.
T | C | R | |
---|---|---|---|
Selling price | $1,600 | $1,800 | $1,400 |
Units | 420 | 400 | 380 |
T | C | R | |
---|---|---|---|
$ | $ | $ | |
Material | 430 | 500 | 360 |
Labour | 220 | 240 | 190 |
Variable overheads | 110 | 120 | 95 |
Labour costs are 60% fixed and 40% variable. General fixed overheads excluding any fixed labour costs are expected to be $55,000 for the next year.
Required:
(d) Explain what would happen to the breakeven point if the products were sold in order of the most profitable products first.
Note: You are NOT required to demonstrate this on the graph drawn in part (c). (2 marks)