Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please give me the answer of both parts. Question 3 The Ashoka Sports Ltd manufactures quality soccer balls as per clients' specifications. Most of their
Please give me the answer of both parts.
Question 3 The Ashoka Sports Ltd manufactures quality soccer balls as per clients' specifications. Most of their clients are sports retailers. One of the big local retailers wants to place an order for soccer balls. The retailer wants to buy 6000 balls of a specific quality at the current quoted price of 24 each, but could place a bigger order if a better price is offered. The costs for this particular order have been estimated as follows: Variable Costs per unit: Direct Materials Direct Labour Variable Selling overhead Total 5.40 7.20 3.40 16.00 Attributable Fixed Costs: Production Administration 12,000 8,000 Required: a) Calculate the estimated profit at the current price, the breakeven number of balls, the breakeven revenue, and the margin of safety (in both units and as a percentage). (6 marks) b) The marketing manager has been negotiating the price for future orders and has provided the following data on price and demand for soccer balls: Price ( per Ball) 14 20 24 28 30 Possible order (no. of Balls) 8000 7000 6000 4400 3600 Based on the marketing manager's data, what should the revised selling price be if fixed and variable costs stay the same? (6 marks)Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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