Question 2

Question 2 - A Team Publications

A Team publication produces books for publication to the adult market. Books are old for £20 each The cost per book is £1 for paper and binding and £0.50 for printing and £0.50 for authors royalties. Salaries amount to £50 000 per year whilst scheduled maintenance is £10000. Advertising is budgeted and fixed at £20 000 per year with other fixed costs amounting to £20 000 per year. The cost accountant is interested in the breakdown of costs and revenues at 5000 unit intervals.

Level of Output	Total Revenues	Fixed Costs	Variable Costs	Total Costs	Profit /Loss
5000
10000
15000
20000
25000
30000
35000
40000

Questions

1. Complete the above table (10 marks)

2. A Team Publications wants to make a target profit of £25000. If costs remained unchanged, examine the impact. (7 marks)

3. Assess the accuracy and usefulness of the above cost information. (8 marks)