Statistic Problems
Bravo Ltd provides a single standard service. The business’s results for the past
two months are as follows:
April May
Sales (Units) – 2,200 2,800
Sales revenue (£) – 198,000 252,000
Operating profit (£) – 28,000 52,000
There were no changes, of any description, in selling prices or costs over the two months.
Required:
A. Given the total cost and activity levels in terms of sales units per each month, identify variable and fixed cost using high-low method.
B. What is the break-even point for the business’s activities?
C. Calculate contribution margin ratio %.
D. Calculate margin of safety for each month in units as well as percentage terms.