Angelicus and Co. manufactures three different qualities of lock, Domestic, Commercial and Industrial. The company's results for the year ended 31 March 2003 were as follows.

Fixed overheads are absorbed on the basis of 50% of direct materials. 

Required 

(a) For the year ended 31 March 2003 calculate, for each type of lock, 

(i) The contribution per unit; 

(ii) The contribution as a percentage of sales. 

Give answers to a maximum of three decimal places. Show all workings 

(b) Calculate the break-even point for each type of lock in both units and dollars. 

(c) Advise whether Angelicus should cease production of Domestic and Commercial locks. Give your reasons.

Transcribed Image Text:

Sales (units) Sales (total value) Total costs Direct material Direct labour Variable overheads Fixed overheads Profit (loss) Domestic Commercial 120 000 45 000 $000 $000 240 180 108 60 2454 54 246 66 30 (6) 33 183 (3) Industrial Total 56 250 221 250 $000 $000 450 870 84 150 120 42 396 54 258 240 198 129 825 45