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At a Price of £32, the Estimated Monthly Sales of a Product

Question 8

Essay

At a price of £32, the estimated monthly sales of a product are 12,000 units. Variable costs include manufacturing costs of £18 and distribution costs of £6. Fixed costs are £40,000 per month.

Required:

Determine each of the following values:
a.Unit contribution margin
b.Monthly break-even unit sales volume
c.Before-tax monthly profit
d.Monthly margin of safety in units

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