8- Emran Company has a current production capacity level of 200,000 units per month. At this level of production, variable costs are $0.50 per unit and fixed costs are $0.50 per unit. Current monthly sales are 173,000 units. Gates Company has contacted Emran Company about purchasing 20,000 units at $1.00 each. Current sales would not be affected by the special order and no additional fixed costs would be incurred on the special order. Emran Company's change in profits if the order is accepted will be a a. $20,000 increase c. $10,000 increase Second Question: Grade Ahmad's Company has a joint process, which produces three products, X, Y, and Z. Each product may be sold at split off or processed further and then sold. Joint processing costs for a year amount to $30,000. Other relevant data are as follows: Faculty of Business Exam Question Form - Teaching & Exams Follow-up procedures/ Faculty of Business b. $20,000 decrease d. $10,000 decrease Sales Value at Split off $15,500 bang br 18,000 24,000 Total fixed costs Unit variable costs Unit selling price Third Question: The following information is for Dareen Corporation: Required: a. Compute the contribution margin per unit. b. Compute the contribution-margin ratio. Required: What will be the effect on profits of processing each product further? c. Compute the break-even point in units. d. Compute the break-even volume in dollars. Separable Processing Costs after Split off 10-123 $2,200 8,000 11,500 $500,000 $50.95 $68.50 Budd POD Sales Value at Completion $17,700 23,000 37,500 1 F Grade 10 8

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