Question
Kindly Assist with the attached Cost and Management Accounting Question Dishwasher Company currently earns an annual contribution of N$2 880 000 from the sale of
Kindly Assist with the attached Cost and Management Accounting Question
Dishwasher Company currently earns an annual contribution of N$2 880 000 from the sale of 90 000 bottles of dishwashing liquid. Fixed costs are N$800 000 per annum. The management of Dishwasher Company is considering reducing the selling price per unit to N$48. The estimated levels of demand at the revised selling price and the probabilities of them occurring are as follows: Demand 100 ooo 120 ooo Probabili 0.40 0.60 The estimated variable costs per unit at either of the increased levels of demand and the probabilities of them occurring are as follows: Variable cost (per unit) N$21 N$19 Probability 0.25 0.75 The level of demand and the variable cost per unit are independent of each other. REQUIRED 3.1. Calculate the total probability that the profit will increase from its current level if the sellin rice is reduced to N$48. Total marks Marks 10 10
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started