Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

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?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions