Q3: CVP Analysis + Costing Methods [15 Marks] Strong Current is a one product business...
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Q3: CVP Analysis + Costing Methods [15 Marks] Strong Current is a one product business and manufactures board shorts. They operate out of rented premises in Byron Bay, where the factory is split into a manufacturing and storage area and a retail space. You, as the management accountant for the firm, have been asked to prepare CVP analysis using the following information from the previous financial year. Required: 1. Calculate how many board shorts Strong Current needs to sell to break even. [5 marks] 2. If Strong Currents sold 3 000 boards what would this indicate about their margin of safety? [5 marks] 3. If Strong Current decided to introduce beach towels into their product offering and forecasted the following sales volumes, would they break even? [5 marks]
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