Quelpr
3 marksCost-Volume-Profit (CVP) Analysis

CAPE Accounting Unit 2 · 2014 · Paper 2 · Question 3(b)(iii)

McIntosh Ltd makes one product with factory capacity of 200,000 units per year. Budgeted Income Statement: Sales (150,000 units × 75) 11,250,000; Direct Material 2,250,000; Direct Wages 3,000,000; Variable Production Overhead 300,000; Fixed Production Overhead 1,250,000; Variable Distribution Overhead 900,000; Fixed Distribution Overhead 500,000; Net Profit $3,050,000.

Calculate the margin of safety in units.

This question uses a figure or table from the paper — you'll see it when you practise.

The mark scheme is shown once you've answered.

Practise this question

Other parts of this question

  1. 3(a)(i)List FIVE assumptions of breakeven analysis.[5 marks]
  2. 3(a)(ii)State why EACH of the five assumptions stated in (a)(i) may NOT always be true.[5 marks]
  3. 3(b)(i)Calculate the breakeven point in units.[3 marks]
  4. 3(b)(ii)Calculate the breakeven point in dollars.[3 marks]
  5. 3(b)(iv)Calculate the margin of safety in dollars.[3 marks]
  6. 3(c)(i)State THREE objectives of budgeting.[3 marks]
  7. 3(c)(ii)Outline TWO features EACH of the imposed, participative, and negotiated budget styles.[6 marks]
  8. 3(c)(iii)State the role of a budget committee.[2 marks]
  9. 3(c)(iv)Name TWO sections of a cash budget.[2 marks]

More practice: the rest of this paper · more Cost-Volume-Profit (CVP) Analysis questions · all CAPE Accounting Unit 2 past papers