Question
Factory A produces bicycles, which are sold for 100 each. The factory can make up to 1,000 bicycles a month. Each month, the factory incurs
Factory A produces bicycles, which are sold for
100
each. The factory can make up to 1,000 bicycles a month. Each month, the factory incurs total fixed costs of
16,000
in rent, security costs, transport and salaries. In addition, the factory incurs variable costs of
60
per bicycle manufactured and sold.\ a. What is the break-even level of output?\ b. What is the break-even level of revenue?\ Calculate BEP using 2 methods: Revenue and via CM ratio\ How many bicycles would Factory A need to produce and sell, in order to make a monthly profit of
20,000
?\ Factory A usually produces and sells 500 bicycles a month. What is its margin of safety ratio, in terms of units of output?\ Factory B produces scooters, which are also sold for
100
each. Like factory
A
, it can make up to 1,000 scooters per month. Unlike Factory A, it has total fixed costs of
44,000
per month, and variable costs of
20
per scooter.\ Calculate (a) the break-even level of output and (b) the break-even level of revenues. Illustrate your answers with a graph.\ How many scooters would Factory B need to produce and sell, in order to make a monthly profit of
20,000
?\ Marionette Ltd makes puppets which it sells for
8
each. Management believes that the company could produce up to 55,000 puppets per year. During the previous year output was 40,000 puppets with the following costs:\ Per Puppet\ Direct materials\ Direct labour\ Variable overheads\ Fixed costs (for year)\ production\ selling\
65,000
\
28,000
\ Required\ a. Calculate the company's break-even level of output for the previous year.\ b. How much profit did the company make in the previous year?\ c. How many more puppets would Marionette Ltd have to sell to make a profit of
50,000
, if the selling price was unchanged?\ d. At what price would Marionette Ltd have to sell 40,000 puppets, in order to make a profit of
50,000
, assuming all other factors remain constant?
Factory A produces bicycles, which are sold for 100 each. The factory can make up to 1,000 bicycles a month. Each month, the factory incurs total fixed costs of 16,000 in rent, security costs, transport and salaries. In addition, the factory incurs variable costs of 60 per bicycle manufactured and sold. a. What is the break-even level of output? b. What is the break-even level of revenue? Calculate BEP using 2 methods: Revenue and via CM ratio How many bicycles would Factory A need to produce and sell, in order to make a monthly profit of 20,000 ? Factory A usually produces and sells 500 bicycles a month. What is its margin of safety ratio, in terms of units of output? Factory B produces scooters, which are also sold for 100 each. Like factory A, it can make up to 1,000 scooters per month. Unlike Factory A, it has total fixed costs of 44,000 per month, and variable costs of 20 per scooter. Calculate (a) the break-even level of output and (b) the break-even level of revenues. Illustrate your answers with a graph. How many scooters would Factory B need to produce and sell, in order to make a monthly profit of 20,000 ? Marionette Ltd makes puppets which it sells for 8 each. Management believes that the company could produce up to 55,000 puppets per year. During the previous year output was 40,000 puppets with the following costs: Required a. Calculate the company's break-even level of output for the previous year. b. How much profit did the company make in the previous year? c. How many more puppets would Marionette Ltd have to sell to make a profit of 50,000, if the selling price was unchanged? d. At what price would Marionette Ltd have to sell 40,000 puppets, in order to make a profit of 50,000, assuming all other factors remain constant? Factory A produces bicycles, which are sold for 100 each. The factory can make up to 1,000 bicycles a month. Each month, the factory incurs total fixed costs of 16,000 in rent, security costs, transport and salaries. In addition, the factory incurs variable costs of 60 per bicycle manufactured and sold. a. What is the break-even level of output? b. What is the break-even level of revenue? Calculate BEP using 2 methods: Revenue and via CM ratio How many bicycles would Factory A need to produce and sell, in order to make a monthly profit of 20,000 ? Factory A usually produces and sells 500 bicycles a month. What is its margin of safety ratio, in terms of units of output? Factory B produces scooters, which are also sold for 100 each. Like factory A, it can make up to 1,000 scooters per month. Unlike Factory A, it has total fixed costs of 44,000 per month, and variable costs of 20 per scooter. Calculate (a) the break-even level of output and (b) the break-even level of revenues. Illustrate your answers with a graph. How many scooters would Factory B need to produce and sell, in order to make a monthly profit of 20,000 ? Marionette Ltd makes puppets which it sells for 8 each. Management believes that the company could produce up to 55,000 puppets per year. During the previous year output was 40,000 puppets with the following costs: Required a. Calculate the company's break-even level of output for the previous year. b. How much profit did the company make in the previous year? c. How many more puppets would Marionette Ltd have to sell to make a profit of 50,000, if the selling price was unchanged? d. At what price would Marionette Ltd have to sell 40,000 puppets, in order to make a profit of 50,000, assuming all other factors remain constant
Factory A produces bicycles, which are sold for
100
each. The factory can make up to 1,000 bicycles a month. Each month, the factory incurs total fixed costs of
16,000
in rent, security costs, transport and salaries. In addition, the factory incurs variable costs of
60
per bicycle manufactured and sold.\ a. What is the break-even level of output?\ b. What is the break-even level of revenue?\ Calculate BEP using 2 methods: Revenue and via CM ratio\ How many bicycles would Factory A need to produce and sell, in order to make a monthly profit of
20,000
?\ Factory A usually produces and sells 500 bicycles a month. What is its margin of safety ratio, in terms of units of output?\ Factory B produces scooters, which are also sold for
100
each. Like factory
A
, it can make up to 1,000 scooters per month. Unlike Factory A, it has total fixed costs of
44,000
per month, and variable costs of
20
per scooter.\ Calculate (a) the break-even level of output and (b) the break-even level of revenues. Illustrate your answers with a graph.\ How many scooters would Factory B need to produce and sell, in order to make a monthly profit of
20,000
?\ Marionette Ltd makes puppets which it sells for
8
each. Management believes that the company could produce up to 55,000 puppets per year. During the previous year output was 40,000 puppets with the following costs:\ Per Puppet\ Direct materials\ Direct labour\ Variable overheads\ Fixed costs (for year)\ production\ selling\
65,000
\
28,000
\ Required\ a. Calculate the company's break-even level of output for the previous year.\ b. How much profit did the company make in the previous year?\ c. How many more puppets would Marionette Ltd have to sell to make a profit of
50,000
, if the selling price was unchanged?\ d. At what price would Marionette Ltd have to sell 40,000 puppets, in order to make a profit of
50,000
, assuming all other factors remain constant?
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/07/669bfe888ab87_271669bfe87d648b.jpg)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started