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Faber-Cleanz Ltd. is a manufacturer of municipal litter bins in Kamloops, B.C. Each bin is sold for $255. The bins cost $87 in direct materials
Faber-Cleanz Ltd. is a manufacturer of municipal litter bins in Kamloops, B.C. Each bin is sold for $255. The bins cost $87 in direct materials (all variable costs) and $43 in direct labor (all variable costs). In December 2021 the company plans to sell 1,600 bins. Its budgeted fixed costs for the month are $150,350.
- What is the companys budgeted contribution for December 2021? (3 marks)
- What is the companys budgeted net profit for December 2021? (2 marks)
- Calculate the breakeven sales in dollar value for Faber-Cleanz. (3 marks)
- Calculate the new breakeven sales (in dollar value) for the company if fixed cost increased by 10%. (2 marks)
- Calculate the following if the company wants to allocate 15% margin of safety to its budgeted profit before the increase of its fixed cost (in (d)):
- Targeted sales in dollar value and, (2.5 marks)
- Targeted sales in number of units. (2.5 marks)
[Total = 15 Marks]
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