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Cable Company's Lay Division can lay one kilometre of electrical underground cable at a variable cost of $1,500 in cities and for $900 in
Cable Company's Lay Division can lay one kilometre of electrical underground cable at a variable cost of $1,500 in cities and for $900 in rural areas. Weekly fixed costs are $22,000 for the work in the cities and $30,000 for the work done in the rural areas. For the coming week the Division has a budget of laying 30 kilometers in cities and 20 kilometers in rural areas. The budgeted selling price is $2,500 per kilometre of laid cable in cities and in rural areas alike. Instructions: a) What is the budgeted contribution margin for the coming week in total $ for the work done in cities? b) What is the budgeted contribution margin for the coming week in total $ for the work done in rural areas? c) What is the budgeted income of Lay Division for the coming week? d) What is the break even point in kilometers for the work done in the cities? e) What is the break even point in kilometers for the work done in the rural areas?
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