Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 8: Calculating CVP Leghorn Chicken Limited presently produces doors and tables for the UAE and Jordan markets but is looking to expand to cover

image text in transcribed

Question 8: Calculating CVP Leghorn Chicken Limited presently produces doors and tables for the UAE and Jordan markets but is looking to expand to cover a greater international range. The key planned financial information related to the company's key products for 2022 are as follows: Activity Selling Price Direct Material (per unit) Direct Labour (per unit) Variable Manufacturing Overhead (per unit) Variable Selling Expense (per unit) Fixed Manufacturing Overhead (total) Fixed Administrative Overhead (total) Fixed Marketing Overhead(total) Doors $215.90 $40.01 $14.50 $28.73 $12.98 $111,158,000 $88,222,000 $199,260,000 Tables $255.90 $115.11 $36.50 $12.73 $29.98 $119,698,000 $223,578,000 $79,555,000 The company has a sales mix ratio of 5:3. The company has estimated that in 2022 they will produce and sell 80,000 total units. Required: A) Calculate the contribution margin per unit and the contribution ratio for Leghorn Chicken Limited based on production and sales estimates for 2022 and based on the sales mix of 5:3. B) Calculate the total number of units that are required to be sold in 2022 in order for Leghorn Chicken Limited to breakeven given the 5:3 sales mix ratio. C) Calculate the total sales revenue Leghorn Chicken Limited would achieve at the breakeven quantity given the 5:3 sales mix ratio and projected production and sales estimates for 2022. D) Assume in 2022 the minimum net income Leghorn Chicken Limited wishes to achieve is $58,000,000. Given the sales mix ratio of 5:3, what is the revenue Leghorn Chicken Limited would generate to ensure achieve the desired minimum net income and the number of doors and tables to be sold

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Internal Auditing Assurance And Advisory Services

Authors: Kurt R. Reding, Paul J. Sobel, Urton L. Anderson, Michael J. Head, Sridhar Ramamoorti, Mark Salamasick, Cris Riddle

3rd Edition

0894137409, 978-0894137402

More Books

Students also viewed these Accounting questions