Part A (4 marks) The following costs are incurred by XMB Bikes a manufacturer of women's bicycles. i. Rent costs of the office building ii. The cost of handlebars included on each bicycle iii. Th hourly rate paid to cleaners for cleaning the office building iv. Sales commissions paid to sales staff which are based on the number of bicycles sold each month. Required: For each cost indicate if it is: a) a product or period cost b) a variable or fixed cost Part B (8 marks) Clarks Limited manufactures and sells netball shoes for $200 each. During May 2022 the company sold 300 pairs of shoes and incurred variable costs of $45,000 to manufacture the shoes. Required: a) Calculate the contribution margin per unit. Show all your workings. (2.5 marks) b) If the break-even point in sales dollars for May 2022 is $49,200 calculate the total fixed costs for May. Show all your workings. (2.5 marks) c) Calculate the margin of safety ratio. Show all your workings. (2 marks) d) Explain how Clark Ltd's management may interpret your calculation of the margin of safety ratio in (c) above (1 mark). Part C (8 marks) The following cost data relates to Markhall Ltd a manufacturer of printed stationery for the month of August 2021. Required: Calculate the following costs for August 2022 showing all your workings. a) Prime Costs (2 marks) b) Manufacturing Overhead Costs ( 3 marks) c) Period Costs (3 marks) Part A (4 marks) The following costs are incurred by XMB Bikes a manufacturer of women's bicycles. i. Rent costs of the office building ii. The cost of handlebars included on each bicycle iii. Th hourly rate paid to cleaners for cleaning the office building iv. Sales commissions paid to sales staff which are based on the number of bicycles sold each month. Required: For each cost indicate if it is: a) a product or period cost b) a variable or fixed cost Part B (8 marks) Clarks Limited manufactures and sells netball shoes for $200 each. During May 2022 the company sold 300 pairs of shoes and incurred variable costs of $45,000 to manufacture the shoes. Required: a) Calculate the contribution margin per unit. Show all your workings. (2.5 marks) b) If the break-even point in sales dollars for May 2022 is $49,200 calculate the total fixed costs for May. Show all your workings. (2.5 marks) c) Calculate the margin of safety ratio. Show all your workings. (2 marks) d) Explain how Clark Ltd's management may interpret your calculation of the margin of safety ratio in (c) above (1 mark). Part C (8 marks) The following cost data relates to Markhall Ltd a manufacturer of printed stationery for the month of August 2021. Required: Calculate the following costs for August 2022 showing all your workings. a) Prime Costs (2 marks) b) Manufacturing Overhead Costs ( 3 marks) c) Period Costs
