Part A

Ryde Metal Company manufactures recyclable soft drinks cans and incurs the following costs as part of its operations.

Cost Items	Amount $
Salary of factory supervisor	18,000
Factory utility cost	9,400
Aluminium used	67,500
Commissions paid to sales personnel	11,800
Wages for factory labour	35,600
Insurance on factory equipment	3,500
Depreciation on factory equipment	2,700
Maintenance cost of delivery vehicles	6,300
Advertising cost to promote the product	10,000
Rental for factory space	13,000

Calculate the: (including calculations)

a) Prime cost

b) Conversion cost

c) Period cost

d) Product cost

Part B

Yummy n Easy is a famous fresh ready-made meals business that operates in many suburbs in New South Wales. The selling price of a ready-made meal is $10. It is estimated that the company will incur a variable cost of $168,000 to make and deliver 24,000 meals (estimated production and sales). The companys estimated fixed cost is $51,000.

Calculate the following (including calculations)

a) What is Yummy n Easys contribution margin ratio?

b) Calculate Yummy n Easys break-even point in units (meals).

c) Calculate Yummy n Easys break-even point in sales dollars.

d) (i) What is Yummy n Easys margin of safety ratio? (Round off the answer to the nearest 2 decimal places).

(ii) How can managers of Yummy n Easy use this margin of safety ratio information to manage the profitability of the business?

e) How many meals must the company sell to earn a target profit of $90000?