Question
QUESTION 2 KHALID Ltd is specialized in purchase and sale of different electronics products from abroad. The company has experienced increased market share and decided
QUESTION 2 KHALID Ltd is specialized in purchase and sale of different electronics products from abroad. The company has experienced increased market share and decided to increase its stock in order to capture more customers. The company has recently ordered and received a large consignment of products of various types from one of its suppliers in Asia for a total cost of TZS. 80,000,000/=. The company storekeeper has sorted the products into the following categories. PRODUCT Units ; Selling Price per Unit Category A 12,000; 8,000 TZS. Category B 8,000;. 6,000 TZS. Category C 14,000 ; 4,000 TZS. Total 34,000 The following information is also available: i. The percentage of profit in each of the product categories is the same. ii. Purchase cost is the only variable cost, and fixed costs are higher than variable costs by 19%. iii. Fixed costs are allocated to product categories basing on unit purchased and sold. iv. All product purchased were sold, the company does not keep stocks. Required: (i) Compute the number of units for each product category that should be purchased for the company to breakeven. (ii) If the Company wishes to attain a target profit of TZS. 49,600,000, determine units of each category to be purchased and sold.
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