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Question 1 (10 marks) You are required to group the cost that are listed below for a company in Senawang which manufactures and retails wooden
Question 1 (10 marks) You are required to group the cost that are listed below for a company in Senawang which manufactures and retails wooden based designer furniture. Direct Materials Indirect Production Overheads Administration Costs Direct Labour Research & Development Costs Finance Cost Direct Expenses Selling & Distribution Cost 1. Lubricant for wood cutting machine 2. Printer ink for office computer 3. Factory Rental 4. Interest on Bank overdraft 5. Purchase of raw hard wood 6. Wages for operatives in carpentry department 7. Developing a new product in the laboratory 8. Royalty per unit produce 9. Cost of advertising on delivery vans 10. Supervisor's salary Question 2 (10 marks) Philadelphia Acoustics builds innovative speakers for music and home theater systems. Identify each cost as variable (V), fixed (F), or mixed (M), relative to number of speakers produced and sold. 1. Units of production depreciation on routers used to cut wood enclosures. II. Wood for speaker enclosures. III. Patents on crossover relays IV. Total compensation to salesperson who receives a salary plus a commission based on meeting sales goals. V. Crossover relays VI. Straight-line depreciation on manufacturing plant. VII. Grill cloth. VIII. Cell phone costs of salesperson IX. Glue. X. Quality inspector's salary. Question 3 (5 marks) Warner Ltd sells its only product at a price of $200 per unit. Variable costs are $160 per unit and total costs are $208 000. Current annual sales are 6500 units Required A. What is the company's break-even point in sales units? What is the break-even point in sales dollars? (3 marks) B. What is the company's margin of safety? (2 marks)
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