Question
Hello, please help me out with this.. It's on COST VOLUME PROFIT ANALYSIS Question Jeankelly Company manufactures custom-designed baby shoes and other baby accessory products.
Hello, please help me out with this.. It's on COST VOLUME PROFIT ANALYSIS
Question
Jeankelly Company manufactures custom-designed baby shoes and other baby accessory products. The costs are as follows:
- Variable costs are R10.80 per pair of custom pair of baby shoes,
- The selling price is R16 per custom pair of baby shoes and
- Fixed costs are R 66 560.
Required:
a) What is the contribution margin for one pair of baby shoes? 3 marks
b) How many baby shoes must Jeankelly sell to break? 3 marks
c) If Jeankelly company sells 13 000 pairs of baby shoes, what is the operating income? 4 marks
d) Calculate the margin of safety in units and in sales revenue if 13 000 baby pairs of shoes are sold. 2 marks
e) Draw the CVP graph showing fixed cost, variable costs and break-even point. 8 marks
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