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Question 5: (Total 13 marks) The controller of Rather Production has collected the following information Sales (100,000 Units) $1,600,000 Selling expenses $250,000 (40% variable and
Question 5: (Total 13 marks) The controller of Rather Production has collected the following information Sales (100,000 Units) $1,600,000 Selling expenses $250,000 (40% variable and 60% fixed). Direct materials $490,000 Direct labor $290,000 Administrative expenses $270,000 (20% variable and 80% fixed) Manufacturing overhead $380,000 (70% variable and 30% fixed). Required a. Determine (1) the contribution margin and (2) the fixed costs. (2+2=4 marks) b. Determine the break-even point in (1) units and (2) dollars. (2+2=4 marks) c. Determine the sales required in dollars to earn net income of $200,000. (2 marks) d. Assume that Rather Production meets its target net income, what is the margin of safety ratio
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