Simon has worked out the following figures for new Bobble Hats he is going to sell. He estimates that he can produce 20 000 hats a month with a selling price of textsterling3.50. He expects the machinery costs to be textsterling60 000 per annum, staff salaries are textsterling72 000 per annum and raw materials cost textsterling30 000 per month.What is the contribution margin per 20, 000 hats?

BREAK EVEN POINT

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Simon has worked out the following figures for new Bobble Hats he is going to sell. He estimates that he can produce 20 000 hats a month with a selling price of £3.50. He expects the machinery costs to be £60 000 per annum, staff salaries are £72 000 per annum and raw materials cost £30 000 per month.What is the contribution margin per 20, 000 hats?

A	66 000
B	74 000
C	200 000
D	40, 000

Explanation:

Detailed explanation-1: -What is meant by the term “margin of safety"? answer choices. The amount by which the actual output of a business is greater than its break-even output.

Detailed explanation-2: -Which of the following is a reason for managers knowing the costs of the business? They will be able to increase output. It will help them fix the price of the product(s).

Detailed explanation-3: -When a business has made enough money to pay its costs and begin to make a profit, it has reached its.

There is 1 question to complete.

ECONOMICS

COST ACCOUNTING

BREAK EVEN POINT