Introduction to Accounting and Finance

Question 1
Income statement
Balance sheet
Question 2
a. Calculation of contribution per unit
Particul
ars
Figur
es (in
£)
Material
s 5.25
Labour 2.95
Variable
overhead
s
1.85
Total
variable
cost per
unit 10.05
Particul
ars
Figu
res
(in £)
Selling
price per
unit 13

Total
variable
cost per
unit 10.05
Contribut
ion per
unit 2.95
Assessment of total fixed cost
Particul
ars
Figur
es (in
£)
Producti
on
5900
0
Selling
etc.
4760
0
Total
fixed
cost
1066
00
b.
BEP calculation
Particulars Formula Figures (in £)
Total fixed
cost 106600
Contribution
per unit 2.95
BEP in
units
Total fixed
cost /
Contributio
n per unit 36136
BEP in
GBP
BEP in units
* Selling
price per
unit 469763

Margin of safety: actual sales – BEP sales
Particula
rs
Actua
l
BEP
level
Margi
n of
safety
Tables in
terms of
units
70000 36136 33864
Tables in
terms of
monetary
value
91000
0
46976
8
44023
2
c.
Particula
rs
Figur
es
Figur
es (in
£)
Produces
and Sells
48000
tables
62400
0
BEP
36136
units
46976
3
Profit
15423
7
Question 3
Calculation of payback period