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Break-even analysis
Target profit
Target profit units = (fixed costs + target profit)/WA Contribution
= ($200,000 + $300,000)/$18.33 = 27,278 units
Target profit revenue = (fixed costs + target profit)/WA C/s ratio
= ($200,000 + $300,000)/0.34375 = $1,454,545
Illustrations and further practice
Now try examples 4, 5 and 7 from Chapter 5.
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