AccountingOrganisationsandSociety

Dreamz Cream specialises in manufacturing. The company is currently producing single flavour vanilla ice-cream. Expected selling price per unit is $8 andvariable cost per unit is $4.50. The business has performed well during the last financial year, ending 30 June 2021.

DreamzCreamisexpectedtohavethefollowingcosts:

• Rentexpenseof$4,000perquarter
• Administrationexpenseof$5,000peryear
• Utilitiesexpenseof$800permonth
• Depreciationexpenseofequipment$5,000peryear

AspartofperformingCVPanalysis,pleasecalculatethefollowing:

1.Totalfixedcostfortheyear.

2.Howmanyunitsofvanillaice-creamDreamzCreamneedstoselltoearnapost-taxprofitof$3,500.Assumetaxrateof30%.

3.DreamzCream'smanagementiscurrentlyworkingonintroducingtwonewflavoursofice-creams:chocolateandcookiedough.Thefollowing information has been provided to you as a management accountant in order to perform Cost, Volume, Profit (CVP) analysis:

Vanilla ice-cream Chocolate ice-cream Cookie dough ice-cream- Selling price per unit $ 10 Variable cost per unit $ 4.50- 5.20- 7.80- Sales mix 30% 50%% 20%%