Page 227 - P1 Integrated Workbook STUDENT 2018

Answers

Example 2

Consider the following break-even chart showing budgeted sales and the
break-even point for a product:

What is the sales price?

If planned sales are 1,200 units, what is the margin of safety as a
percentage?

What is the variable cost per unit?

Solution

Selling price

The highest line represents the revenue line. The gradient (or slope of this
line) is determined by revenue/units = price per unit. Taking the one known
point on this line (units = 1,000 and revenue = $15,000) we can calculate the
selling price per unit

=$15,000/1,000

= $15 per unit

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