Question
Beauty Supplies Company manufactures and sells several ranges of artwork. The average revenue and cost of sales are as follows: Selling price per unit $30.00
Beauty Supplies Company manufactures and sells several ranges of artwork. The average revenue and cost of sales are as follows:
Selling price per unit $30.00
| Variable costs per unit: |
|
| Direct materials | $7.00 |
| Direct manufacturing labor | $2.40 |
| Manufacturing overhead | $0.60 |
| Selling costs | $3.00 |
| Annual fixed costs | $108,000 |
- Calculate the contribution margin per unit. (2 marks)
- Calculate the number of units Beauty Supplies Company must sell each year to break even.
(4 marks)
- Calculate the number of units Beauty Supplies Company must sell to yield a profit of
$160,000. (6 marks)
- Managers may use Sensitivity analysis in their accounting system.
- What is sensitivity analysis? (4 marks)
- How is Sensitivity analysis useful to managers? (4 marks)
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Managerial Accounting
Authors: Stacey Whitecotton, Robert Libby, Fred Phillips
4th edition
1259964957, 1260413985, 1260565440, 978-1260413984
