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Aspen manufactures two products, Aye and Bee, at his factory in the United Kingdom. Aspen operates a system of marginal costing. Aspen provides the following
Aspen manufactures two products, Aye and Bee, at his factory in the United Kingdom. Aspen operates a system of marginal costing. Aspen provides the following budgeted information for May 2022. (a) Calculate for May 2022 the : (i) total budgeted profit (Ans : $23,000) (ii) total budgeted fixed factory overheads (Ans : $13,000 ) (b) Calculate, for product Aye only, the : (i) breakeven point in units (Ans : 667 units) (ii) margin of safety in units (Ans : 1,333 units) Aspen has recently obtained a price from a potential overseas supplier quoting $19.50 per unit of Aye based on the current production level of 2000 units. (c) Prepare a budgeted marginal cost statement for Aspen identifying the total budgeted contribution and the total budgeted profit for May 2022 if he purchases all units of Aye from the overseas supplier and continues to manufacture all units of Bee himself. (Ans : Budgeted profit $26,000 )
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