Question
QUESTION # 1 Patsy smith is planning to sell her special knife for $15 per unit. She purchases units from a local distributor for $6
QUESTION # 1 Patsy smith is planning to sell her special knife for $15 per unit. She purchases units from a local distributor for $6 each. She can return any unsold units for a full refund. Fixed costs for booth rental, including lighting and security is $450.
Required
i. Compute the breakeven point in units sold. (5 marks) ii. Suppose the unit purchased is $5 instead of $6 but the selling price is unchanged. Compute the new breakeven point in units sold. (5 Marks)
QUESTION # 2
Elmo has the following information for the month of October, its first month of operations
Work in Process October 1 | 0 |
Units completed and transfered out in October | 120, 000 |
Work in Process, October 30 | 32,000 |
100% completed for materials | |
80% completed for conversion costs |
Costs added in October
Materials | $145, 900 |
Dirct labour | $96,000 |
Overheads | $108,000 |
Required: (1.) Determine the equivalent units of production for October. (2 marks)
2.) Determine the cost of the ending work-in-process. (3.) Determine the cost of goods completed. (4) What is meant by the term equivalent full units? | (3 marks) (3marks) (2 marks) |
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