Question 2
Surge & Company Limited manufactures and sells surgical clippers. The selling price per surgical clippers is £102 with a variable cost of £42. The annual fixed cost of Surge & Company Limited is £520,020 for an estimated annual demand of 60,000 surgical clippers.
Required:
Use the information above, answer questions a) to e).
a) Calculate the contribution per surgical clipper.
b) Calculate the quarterly break-even number of surgical clippers manufactured.
c) Calculate the margin of safety of the surgical clippers in percentage terms. Round your answer to a whole number.
d) Calculate the total profit made by Surge & Company Limited for selling 35,000 clippers.
e) If Surge & Company Limited wants to make a profit of £2,500,020.00, how many surgical clippers should they make and sell?
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