Question

Sibon plc manufactures soft toys for the European market. The costs incurred by the firm are as follows:

$
Materials (per toy) 5
Wages (per toy) 4
Packaging (per toy) 3
Rent of premises 5,000
Machinery hire 3,000
Marketing and administration 1,000


The soft toys sell for an average price of $16. Current capacity of Sibon plc is 3000 toys per year.

Required
Calculate the following:
Contribution per toy sold
Break-even in units of output
Break-even level of sales revenue
Construct a break-even chart showing the break-even level of output and margin of safety.
Fully label the chart.

Answer 1

Answer:

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Explanation:

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Answer 2

Answer:

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