Question
Calculate: Break-even point (in units and in ). Margin of safety at budgeted sales level of 2,500 units. Unit sales required to achieve budgeted profit
- Calculate:
- Break-even point (in units and in ).
- Margin of safety at budgeted sales level of 2,500 units.
- Unit sales required to achieve budgeted profit of 25,00
- A justified recommendation on which option chemical merdiff should choose discussing the risk and return offered by the two options with reference to the concepts of operational gearing and relevant cost.
- Discuss what it means to classify cost according to cost behaviour, cost allocation and decision making purposes using examples from the case. (can use examples from all three documents).
If management to go with outsourcing the manufacturing of the line, the buy-in cost from outsourced manufacturer is going to 220 per unit. Only fixed manufacturing overheads can be saved, but no expected reduction or savings in the administrative and selling and distribution fixed overheads at the sales level of 2,500 units.
| In-House manufacturing |
Selling price ( per unit) | 250 |
Direct materials cost ( per unit) | 125 |
Direct labour cost ( per unit) | 70 |
Fixed manufacturing overheads | 60,000 |
Fixed administrative overheads | 20,400 |
Fixed selling and distribution overheads | 40,800 |
i need this ASAP.
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