Question

Question 2

A company makes three products, A, B and C, and have forecast the following sales and variable costs for September 2019.

Product                                             Sales (MVR)                         Variable Costs (MVR)       

A                                                         1,100,000                              450,000

B                                                         750,000                                  425,000

C                                                         800,000                                  500,000

Totals                                                2,650,000                              1,450,000

Fixed costs are estimated to be MVR 800,000.

Required:

1. Plot, on graph paper, the marginal income slope for the three products and indicate the average income slope. (15 marks)
2. Read from the graph and, confirm by calculation, the breakeven point. (5 marks)

Answer 1

ANSWER 1

More information is required to answer the first question, I will require actual units sold for each product to determine a curve. For the calculation of answer 2 I have assumed 100 units sold for each products, can't do this in answer 1 as the curve will be straight and it is incorrect in case of marginal income.

Please post full question in the comments section

ANSWER 2

Product	Units	Sales	Variable Cost	Marginal Income	Break even Units
A	100	1100000	450000	650000	123
B	100	750000	425000	325000	246
C	100	800000	500000	300000	267
			Contribution	1275000
			Fixed Cost	800000
			Income	475000