©Ali Jan Damani

Test Topic: Breakeven Analysis

Instructor: Ali Jan Damani
Time: 45 minutes
Maximum Marks: 50

Student Name : ______________________________

Date : ______________________________

Parents’ Sign : ______________________________

Question Number Maximum Marks Marks Obtained

1 4

2 4

3 4

4 8

5 8

6 16

7 6

TOTAL MARKS: 50
OBTAINED MARKS:
PERCENTAGE:
GRADE:
©Ali Jan Damani

Ullu Ltd has provided the following information:

Rent 150,000
Insurance 80,000
Lease 70,000
Mortgage 50,000
Sales 50,000 units @ $25/unit
Variable Cost (Direct) 30,000
Units produced 80,000
Variable Cost (Indirect) 18000

Iskilee Ltd has provided the following information:

Rent 250,000
Insurance 50,000
Lease 25,000
Mortgage 25,000
Sales 20,000 units @ $60/unit
Variable Cost (Direct) 20,000
Units produced 50,000
Variable Cost (Indirect) 38000

Required:
1. Calculate the revenue for both the business. [4]
2. Calculate the total cost for both the business. [4]
3. Calculate the average cost for both the business. [4]
4. Calculate the contribution in units and in value for both the businesses. [8]
5. Calculate the breakeven in units and in dollars for both the businesses. [8]
6. Prepare the breakeven graph for both the businesses. [16]
7. Explain, in your own words, why is breakeven analysis important for the
business. [6]