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QUESTION FOUR PART A Hillman Ltd sells a kitchen utensil for $10000. The unit variable cost per utensil is $5000 plus a selling commission of
QUESTION FOUR PART A Hillman Ltd sells a kitchen utensil for $10000. The unit variable cost per utensil is $5000 plus a selling commission of 10%. Fixed manufacturing costs total $125,000 per month, while fixed selling and administrative costs total $250,000. The company is budgeting a sale of 5000 utensils for the current month. What is the contribution margin per utensil? What is the breakeven point in utensils? How many utensils must be sold to earn a targeted profit of $750,000? Calculate the Margin of Safety as a percentage of sales. Briefly outline the main limitations of the Break Even Analysis. PART B For the next 6 months period, market research has found that the selling price of a new protective cover for the utensils will be one and a half time of its cost per unit. Hillman's cost accountant has provided the following details with respect to overheads: Month SD cards sold Overheads ($) 521,000 January 3200 February 3100 509,000 March 3500 540,000 557,000 April 4100 May 2900 485,000 June 3800 547,000 Richman is expecting that sales for July will reach 4500 covers. Calculate the selling price of one cover in July
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