Question
Funiturindo sells chairs, tables, and cupboards. Unit cost and sales data shown below: Description Chairs Tables Cupboards Unit sales price (Rp.) 120.000 300.000 600.000 Direct
Funiturindo sells chairs, tables, and cupboards. Unit cost and sales data shown below: Description Chairs Tables Cupboards Unit sales price (Rp.) 120.000 300.000 600.000 Direct material cost/unit (Rp.) 45.000 150.000 300.000 Direct manufacturing labor/unit (Rp.) 30.000 60.000 180.000 Manufacturing overhead/unit (Rp.) 15.000 30.000 60.000 Sales mix 60% 20% 20% Fixed costs are Rp. 1.178.100.000. Required: a) Compute the break event point in units and proof it. (10 points) b) Funiturindo is considering buying a new machine. If the purchase of a new machine is made, it will increase fixed costs by 60% and decrease direct labor variable costs by 60%. Is it better to buy a new machine or not if the target is to decrease the BEP units? Detail the calculation.
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