Question
For a company you are given the following information about their products: PRODUCT 1 PRODUCT 2 TOTAL unit price 10 25 direct material per unit
For a company you are given the following information about their products:
PRODUCT 1 | PRODUCT 2 | TOTAL | |
unit price | 10 | 25 | |
direct material per unit | 3 | 5 | |
direct materials total | 3000 | 5000 | 8000 |
indirect production cost | 3000 | ||
indirect admin cost | 9000 | ||
TOTAL COST | 20000 |
a) what's the company's profit for the period?
b) Indirect cots consists of 30%. variable cost. if sales quantity of product 1 and 2 doubles , what's the new profit?
c) After the increase in volume of product 1 and 2 , if the allocation rate for indirect production cost is based on total direct material usage and the indirect admin cost is based on number of units produced, what is the absorption cost of product 1?
d) what's the profit of one unit of product 1?
e) what's the company's break even sales level?
f) what's the company's security margin rate after they doubled their sales in question b)
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