Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Delight Treats Limited, a supplier of donuts, sells two different types of six pack donuts - pineapple donuts and cherry donuts. The selling prices

image text in transcribed

Delight Treats Limited, a supplier of donuts, sells two different types of six pack donuts - pineapple donuts and cherry donuts. The selling prices of these donuts are $650 for pineapple donuts and $750 for cherry donuts - which are usually in higher demand. The management of Delight Treats Limited consistently maintains a twenty-five (25%) contribution margin for each product sold and for the month of December 2019, the total fixed cost was $$88,070. In spite of the current pandemic, management is planning to sell 1,500 boxes of pineapple donuts and 1,800 boxes of cherry donuts. Required: a) b) c) Calculate the break-even point (units of each product and total). (9 marks) Calculate the break-even point in dollars (total revenues). (3 marks) Calculate how many units (of each and in total) should be sold to achieve a target income of $86,308.60 before tax. (3 marks) d) Calculate how many units (of each and in total) should be sold to achieve a target income of $53,546.56 after tax, tax rate is 20%. (6 marks) State two (2) limitations of CVP analysis. (4 marks) e)

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

Accounting Business Reporting For Decision Making

Authors: Jacqueline Birt, Keryn Chalmers, Albie Brooks, Suzanne Byrne, Judy Oliver

4th Edition

978-0730302414, 0730302415

More Books

Students also viewed these Accounting questions

Question

6. Explain why the IT projects are of strategic importance.

Answered: 1 week ago

Question

Q4 What are business applications for user-generated content?

Answered: 1 week ago