Answered step by step
Verified Expert Solution
Question
1 Approved Answer
3a) What is meant by 'cost behaviour'? (Give examples)- 3 marks (type in this box) Crayon Ltd manufactures writing pens. The following information relates to
3a) What is meant by 'cost behaviour'? (Give examples)- 3 marks (type in this box) Crayon Ltd manufactures writing pens. The following information relates to the sales of WRITING PENS for next year: Total Profit Quarter Total Sales Revenue Q12 12,800 Q2 16,000 Q34 19,2004 Q4 25,600 TOTAL 73,600 3,000 5,000- 7,000 11,000+ 26,000 It is anticipated that 4,600 writing pens will be sold next year. 3bi) Calculate the sales revenue per writing pen (unit)? 1 mark (type in this box) 3bii) What is the number of sales (units i.e. pens) in Q1 (quarter 1)?- 1 mark (type in this box) 11 4 marks 3c) Calculate the variable cost per writing pen (using the Hi Lo method or similar) (type in this box) 3d) Calculate the total fixed costs for the Writing Pen production for the 2 marks Page 9 of 164 next year. e (type in this box) 3e) Calculate the BEP in units and for writing pens. 5 marks Units: (type in this box) : (type in this box) 3f) Calculate the margin of safety in units and for writing pens. 3 marks Units: (type in this box) : (type in this box) 3g) What does the Margin of Safety help this company to assess?- 2 marks (type in this box) An overseas supplier has offered to provide writing pens at 5 per unit. These pens differ slightly to the ones produced by Crayon Ltd and would be sold at 18 per unit. Crayon would still keep the writing pen factory as a contract has been signed for machinery and rent. + 3 marks 3h) Should Crayon Ltd accept the overseas offer? Evidence this with numeric calculations. Accept the offer: Yes or No- (type in this box) Page 10 of 16% Reasons: (type in this box) 4 marks 3i) Discuss in detail TWO non-financial factors which Crayon Ltd should consider when using overseas suppliers. 1. (type in this box) LLLLL NL (type in this box) ****** 3 marks 3j) In order for a cost to be relevant to decision making, what qualities must it have? (type in this box) 3k)_Explain what an opportunity cost is. Give an example. 3 marks Explanation: (type in this box) Example: (type in this box)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started