Ferguson Ltd manufactures a single product green. For the period of 2021, total sales for 500 units amount to N$120 000. The company also reported fixed costs of N$22,400 with total costs of N$102,400.

Required:

Calculate the degree of operating leverage

2.The following data belongs to Epandulo Manufacturing for the Month of March 2022.

Single Bed

3 Quarter

Double Bed

Sales mix

25%

30%

45%

Sales / unit

N$ 2,300

N$ 2,800

N$ 3,000

For the month of March, the company had a contribution margin ratio of 0,50. Epandulo's total sales and total costs are equal at the sales value of N$ 306 000.

Purple World manufactures and sells a single product. The following information is available for the period ended March 2021.

Budgeted costs at normal activity of 25,000 units

N$

Prime cost

375,000

Variable production overheads

25,000

Fixed production overheads

150,000

Variable selling and administration overhead

50,000

Fixed selling and administration overhead

100,000

During the period, Purple World produced 30,000 units and sold 24 000 units at N$35 per unit. At the beginning of the period 4 000 units were inventory, which were valued at the budgeted costs shown above. Actual costs incurred were as budgeted.

Required:

1.How low or high is the absorption costing profit over the marginal costing profits?

2.Calculate the total period cost under absorption costing

3.Using the direct method, calculate the cost of sales.

jetty & Co absorbs overheads based on labour hours at N$50/hour. The company sells two products, X and Y. Total cost for product X is N$150/unit, while product Y costs N$100/unit. Product X requires a total of 15,000 hours in total for production. Jetty & Cos total budgeted overheads amount to N$1000,000. The cost accountant determined that Jetty & Cos overheads have been under absorbed by N$120,000.

Required:

Calculate the total number of hours needed to produce product Y.