DISCUSSION QUESTION A) What assumptions guide the use of profit volume analysis? B) A certain manufacturing company had

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Discussion Question A What Assumptions Guide The Use Of Profit Volume Analysis B A Certain Manufacturing Company Had 1 (137.74 KiB) Viewed 29 times

DISCUSSION QUESTION A) What assumptions guide the use of profit volume analysis? B) A certain manufacturing company had Tshs 50,000,000 of sales and Tshs 8,000,000 of before tax profits in 2011. An analysis of the company's sales revealed the following: Fixed costs = 10,000,000 • Variable costs = 20,000,000 • Semi variable costs(assume 50% variable) = 10,000,000 1. What contribution does each shilling of sales make to fixed cost and profit? 2. What is the break even sales? 3. What is the break even quantity? 4. What would be the effect on profit if prices are increased 30% but customers who currently account for 10% of sales are lost as a result?