Question
Ahmed & Mohamed Company manufactures iron decorative fences. In preparing for operations for the coming year, management has made the following estimates: unit total 1000000$
Ahmed & Mohamed Company manufactures iron decorative fences. In preparing for operations for the coming year, management has made the following estimates:
unit | total | |
1000000$ | sales ($20,000) | |
200000$ | Direct Materials | |
50000$ | direct employment (variable) | |
additional manufacturing cost | ||
70000$ | variable | |
80000$ | fixed | |
Selling and administrative expenses | ||
100000$ | variable | |
30000$ | fixed |
Required: A- Completing the filling of the limits at the cost of production per unit
B-. Calculate the following items: 1. Contribution margin per unit. 2. Contribution margin ratio, variable cost ratio 3. Sales break-even point in units and dollars. 4. Margin of safety and percentage of safety margin. 5. If sales increase by 20% with no change in total fixed cost, what will be the change in net operating income? 6. Review the original statement The manager believes that an increase in ads by 10,000 will lead to an increase in sales by 50,000. What will be the impact on the net income and is it right? 7. Referring to the original data, if production costs per unit increased by 10%, and if selling and fixed administrative expenses increased by 5%, what would the new sales dollar break-even point be?
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