Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
Answer the following questions. Remember that all calculations should be show laid out appropriately. 1 A company manufactures chocolate bars for which the following data
Answer the following questions. Remember that all calculations should be show laid out appropriately. 1 A company manufactures chocolate bars for which the following data is Variable costs (per bar) $0.70 Fixed costs $5 million Current output (number of bars made) 12 million bars Selling price $1.50 per bar a) Calculate the 0 Contribution per bar contribution =selling price - variable cost(per bar) contribution=1.50 -0.70 = 0.80 $ contribution = 0.80 $ (ii) Break even output contribution per unit = 0.80 $ Break even output=fixed costs / contribution per unit break even output= 5,000,000/0.80 = 6,250,000 break even output = 6,250,000 $ (1) Margin of safety margin of safety = current output-break even)/(current output) x 100 current output=12,000,000 break even: 5,000,000 12,000,000 - 5,000,000 / 12,000,000 = (iv) Profit at current output
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/6690be421651f_9216690be41a68a7.jpg)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
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](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started