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Question 2 – Cost Volume Profit ‘Solved’ produces scientific and business calculators. Solved predicts that it...

Question 2 – Cost Volume Profit

‘Solved’ produces scientific and business calculators.

Solved predicts that it will be able to sell 20 000 scientific calculators and 100 000 business calculators in 2021.

‘Solved has the following data on the two products:

Scientific Calculators

Business Calculators

Selling Price (per unit)

60

80

Variable Costs (per unit

42

56

Fixed Costs for the year are expected to be $38,400

35% of Sales are expected to be Scientific calculators.

Required

  1. Calculate the contribution margin for each of the calculator types.
  2. Calculate the breakeven point for the business in calculators.
  3. Calculate the number of calculators of each type which need to be sold to breakeven.
  4. Calculate the amount of profit the business will make if it sells 9,000 calculators.
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