Complete the table below to show the fixed, variable and total costs. In the final column, calculate the profit or loss made by J Kane.
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1 Tsk 1 J Kne sells mchinery to the frm industry. His fixed costs re 10,000 nd ech mchine costs him 400 to buy. He sells them t 600 nd is trying to work out his profit or loss t vrious levels of sles. He hs worked out the following: Complete the tble below to show the fixed, vrible nd totl costs. In the finl column, clculte the profit or loss mde by J Kne. Units Sold Fixed Costs Vrible Costs Totl Costs Sles Profit/ Loss 0 10, ,000 8,000 18, , , ,000 b c From the bove tble, prepre grph by inserting totl costs nd sles revenue figures for units sold. Clerly show the brek even point on your grph. d Wht re fixed costs?... e Wht re vrible costs?... f Wht do these costs dd up to?... g Wht does the brek even point show... N5 Accounting Pge 1
2 Tsk 2 Becky Lwson sells specility birthdy ckes. Her fixed costs re 1,000 nd ech cke costs her 15 for the rw mterils ie eggs, flour etc. She sells ech cke for 40. Complete the tble below to clculte the profit/loss t vrious levels of sles. She hs worked out the following: Complete the tble below to show the fixed, vrible nd totl costs. In the finl column, clculte the profit or loss mde by J Kne. Units Sold Fixed Costs Vrible Costs Totl Costs Sles Profit/ Loss b c From the bove tble, prepre grph by inserting totl costs nd sles revenue figures for units sold. Clerly show the brek even point on your grph. N5 Accounting Pge 2
3 Tsk 3 Adm Ross runs cr vlet service. His fixed costs re 3,000 nd ech vlet costs him 20 for the rw mterils ie cr polish, shmpoo, sponges, chmois etc. He sells ech vlet for 50. Complete the tble below to clculte the profit/loss t vrious levels of sles. He hs worked out the following: Complete the tble below to show the fixed, vrible nd totl costs. In the finl column, clculte the profit or loss mde by J Kne. Units Sold Fixed Costs Vrible Costs Totl Costs Sles Profit/ Loss b c From the bove tble, prepre grph by inserting totl costs nd sles revenue figures for units sold. Clerly show the brek even point on your grph. N5 Accounting Pge 3
4 Tsk 4 The following figures hve been supplied by A Grdiner, who is considering mking plnt pots. He is prticulrly concerned to know how mny he must mke before the product becomes profitble. Fixed Costs = 1,000 Vrible Costs per pot = 3 Selling Price per pot = 8 Complete the tble below using the informtion bove. The first row hs been completed for you. Units Sold Fixed Costs Vrible Costs Totl Costs Sles Profit/Loss 0 1,000-1,000 - ( 1,000) b At wht level of output does A Grdiner brek even?... c From the bove tble, prepre grph to show the brek even point. N5 Accounting Pge 4
5 Tsk 5 A firm hs fixed costs of 1,200. The selling price for its product is 6 per unit nd the vrible cost is 3 per unit. Complete the tble below. Units Fixed Costs Vrible Costs Totl Costs Sles Revenue Profit /Loss ,000 b On sheet of grph pper, construct brek-even chrt nd identify the number of units t which the firm breks even. N5 Accounting Pge 5
6 Tsk 6 From the informtion below, clculte the Totl Cost nd the Totl Revenue figures. b On sheet of grph pper, construct brek even chrt nd identify the point t which the firm breks even. Units Sold Fixed Costs Vrible Costs Totl Costs Totl Revenue (Sles) 0 3,000-3,000-1,000 3,000 2,000 3,000 2,000 3,000 4,000 3,000 3,000 6,000 4,000 3,000 8,000 5,000 3,000 10,000 N5 Accounting Pge 6
7 Tsk 7 The following tble shows the totl costs nd revenues t vrious levels of output. You re required to clculte figures A-I. Units Fixed Costs Vrible Costs Totl Costs Revenue A B 150 C D ,050 E 400 F G H I N5 Accounting Pge 7
8 Tsk 8 Firwy Ltd proposes to mnufcture new design of putter. The tble below shows estimted costs nd revenues t vrious levels of output sold. You re required to clculte figures A to I. No of Putters Fixed Vrible Totl Produced Costs Costs Costs Revenue 0 1,200 0 A = B = 2,500 C = 3, ,200 D = 6,200 6, ,200 7,500 8,700 E = b Explin wht is ment by fixed nd vrible costs nd give one exmple of ech. i Fixed Costs... Exmple... ii Vrible Costs... Exmple... N5 Accounting Pge 8
9 Tsk 9 Jen McKinnon owns nd runs business tht mnufctures nd sells Shetlnd sweters. In 2017, she plns to produce nd sell 500 sweters t 45 ech. She estimtes the following costs: Rent 2,000 Administrtion 2,500 Het & Light 1,500 The production costs for ech sweter re: Lbour 12 Mterils 13 Using the informtion bove, complete the Brek-even Sttement below to clculte how mny sweters would hve to be produced nd sold to llow Jen to brek-even. ESTIMATED BREAK-EVEN STATEMENT OF JEAN MACKINNON FOR THE YEAR ENDED 31 DECEMBER 2017 Sles (revenue per sweter) LESS UNIT VARIABLE COSTS Lbour Mterils CONTRIBUTION PER SWEATER Brek-even Point = Fixed Costs = = units Contribution per unit b Clculte the profit or loss if 400 sweters re produced nd sold in N5 Accounting Pge 9
10 c Stte two dvntges of using brek-even chrt. d Stte 3 limittions of brek-even nlysis. e Explin the mening of ech of the following terms: Contribution... Vrible Costs... N5 Accounting Pge 10
11 Tsk 10 Jnice Smith decides to rent stll t her locl mrket for 1 yer with the purpose of selling ice crem. She hs worked out her costs s follows: Fixed Costs Stll rentl 300 Wges of ssistnt 900 Advertising 10 Electricity 40 1,250 Vrible cost per ice-crem = 40p Selling price per ice-crem = 50p Copy nd complete brek-even tble with the following hedings nd the following sles possibilities: Units Sold Fixed Costs Vrible Costs Totl Costs Sles Profit or Loss 0 2,500 5,000 7,500 10,000 12,500 15,000 17,500 20,000 Using the figures from the tble bove drw up brek-even chrt on suitble grph pper to show the Totl Cost, Fixed Cost nd sles line. You should lso indicted brekeven point nd the re of profit nd the re of loss. N5 Accounting Pge 11
12 Tsk 11 Using the Chrt nswer the questions tht follow: 80,000 Brek Even Chrt for Mobiles Direct 70,000 60,000 Totl Sles nd Totl Costs 50,000 40,000 30,000 TFC TC TSR 20,000 10, Number Mde nd Sold () Wht is the totl cost of production t 700 units? (b) Wht is the Brek-even Point in NUMBER OF UNITS? (c) Wht is the mount of the Fixed Costs? (d) How much profit is mde if 600 units re mde nd sold? (e) How much profit is mde if 200 units re mde nd sold? (f) Wht is the Selling Price per unit? N5 Accounting Pge 12
13 Tsk 12 From the following chrt, clculte the Brek-even point using the formul. Brek-even Chrt Costs & Revenue Fixed Costs Totl Costs Totl Revenue Output My working: To clculte the selling price per unit To clculte the vrible cost per unit To clculte the brekeven point in units N5 Accounting Pge 13
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