Rumpole Ltd is proposing an ex

Rumpole Ltd is proposing an expansion of their product range by manufacturing a new product. It is proposed that the new product will sell for £15 per item and will have a market of between 10,000 and 15,000 items per year. An analysis of the costs at these levels of production is:

(a) Calculate the variable cost per unit and the total fixed cost.

(b) Calculate how many units of the product must be manufactured to:

 (i) break even

 (ii) earn a profit of £13,000.

(c) Calculate how much profit or loss would be made if only 7,000 units were manufactured and sold.

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