Question
A cabinet manufacturing company has started its operations by July, 1st. The following cost items have been determined until the end of December: (a) Raw
A cabinet manufacturing company has started its operations by July, 1st. The following cost items have been determined until the end of December: (a) Raw material #1 -> unit cost is $20 /m2 and 6 m2 is required per cabinet; Raw material #2 -> unit cost is $40 /m2 and 4 m2 is required per cabinet. (b) Spare material (such as screw, lock, nail etc.) -> unit cost is $70 per cabinet. (c) Direct labor costs -> $150 per cabinet. (d) Foreman and supervisor cost -> $100.000 monthly. (e) Machinery depreciation -> $120.000 monthly. (f) Administrative costs of production -> $140.000 monthly. Suppose that the company has produced 2.000 cabinets during the period.
1-What would be the unit cost for these cabinets?
2-Suppose that the company has sold all of its cabinets at a price of 1.800 TL. What is the gross profit?
3-What is the contribution margin?
4-What is the breakeven number of units?
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