Question
A. Alejandra Limited sells one product for which data is given below: Selling price $24 per unit and Variable cost $16 per unit Fixed cost
A. Alejandra Limited sells one product for which data is given below: Selling price $24 per unit and Variable cost $16 per unit Fixed cost per annum $840,000 Required: (i) Calculate the breakeven point in units per annum. (ii) Calculate the number of units that must be sold if Alejandra Limited wishes to earn a minimum profit of $600,000 for the year. (iii) Explain the impact of increasing the selling price and how it will affect Alejandra Limiteds breakeven point. [ No calculations are required] B. Listed below are the two types of cost behaviour, you are required to define each type of cost behaviours. (i) Fixed Costs (ii) Variable Costs C. Alejandra Limited has the following total costs for the manufacture of Product Jandra over a period of 2 months. Using the high-low method, answer the following questions. In the month of January, 16,000 units per produced at a total cost of $110,000 while in the month of February 12,000 units were produced at a total cost of $90,000. Required: (i) Calculate the variable cost per unit produced. (ii) Calculate the fixed cost portion of the total cost. (iii) If the company produces 14,800 units in March, what will be the total cost? [Show all the formulae used and workings to support your final answers]
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