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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
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
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