accounting saturn ltd makes just one product for a major clothing manufacturer 355003

Task 2 Scenario Saturn Ltd makes just one product for a major clothing manufacturer. It is called the Luxury Raincoat. The company has prepared a budget for the forthcoming year. £ Direct material costs per unit of production 35 Direct labour costs per unit of production 20 Factory overheads 50,000 Business rates 30,000 Rent 10,000 The current selling price of the Luxury Raincoat is £70. At present the factory is producing 16,000 raincoats per year. The factory has the capacity to make 20,000 raincoats each year. Tasks 2A Write a report containing the following: Explain what is meant by break even analysis. NB. This is not asking for a definition of break even point. Break even analysis is a technique widely used by production management and management accountants. It is based on categorising production costs between those which are “variable” (costs that change when the production output changes) and those that are “fixed” (costs not directly related to the volume of production). Calculate the break even point from the information in the Saturn Ltd case study by completing the table below. Saturn Ltd Break Even Analysis  Selling price  70  55       Units Sales Variable Costs Fixed Costs Total…