Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Could someone answer for me this question. Thank you in advance No-5 As a costing assistant for a manufacturing company, you are asked to make

Could someone answer for me this question. Thank you in advance
image text in transcribed
No-5 As a costing assistant for a manufacturing company, you are asked to make a number of calculations. The company has a plant capacity of 10,000 units per annum, but at present is working only to about 90% capacity. The pricing policy of the enterprise is to add a 20% mark-up to cost. Costs based on a budget of 10,000 units per annum Direct labor 100,000 100%variable Direct materials 200,000 100%variable Factory overheads 80,000 2 per unit variable Administrative overheads 120.000 fixed costs Total estimated costs 500,000 Tasks: (a) Prepare a table to show total, fixed and variable costs based on a planned output of 10,000 units per annum. (b) Calculate the contribution per unit. (c) What is the estimated profit on the planned output? (d) i. Calculate the break-even points. ii. What is the loss on 10 units below break-even? iii. What is the loss on 10 units above break-even? (e) i. Calculate the contribution/sales ratio(profit/volume ratio) ii. Calculate the profit or loss on sales of 425,000. (1) If the selling price was reduced by 10% and advertising costs were 20,000 to gain an estimated extra 1,500 unit sold, would it be worth going ahead with the project? (9) An improved model is to be launched. Variable costs will increase by 8 per unit. Fixed costs will increase by an estimated 50,000. The selling price to launch the new model is 65. What extra sales are required to cover these costs? vd

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Audit Process Principles Practice And Cases

Authors: Iain Gray, Stuart Manson

3rd Edition

1861529465, 9781861529466

More Books

Students also viewed these Accounting questions

Question

8. Describe the main retirement benefits.

Answered: 1 week ago