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EnglandAccountingQuick questions

3.2 Management accounting

Quick questions on Break-even analysis: contribution, margin of safety and target profit - AQA A-Level Accounting

2short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.

What is q1?
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Fixed costs are 30,00030{,}000 and contribution per unit is 1515. Calculate the break-even output. [2 marks] 30,00015=2,000\dfrac{30{,}000}{15} = 2{,}000 units.
What is q2?
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State one limiting assumption of break-even analysis. [1 mark] For example that selling price and variable cost per unit stay constant.

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