Question Three (10 Marks) The management of F. processing company has engaged you to assist in the
Question:
Question Three (10 Marks) The management of F. processing company has engaged you to assist in the development of information to be used in decision making by the management. The company produces maize meal in tons every year. A number of by-products are realized from this process. The market study indicates that the selling price per ton is likely to be sh.20000. Total variable cost amounts to sh.15000 per ton and total fixed cost amounted to sh. 64,000,000 per year. Required: a) i) Compute per ton contribution margin. (2 marks) ii) Break-even point in units. (2 marks) iii) Sales volume to earn a target income of sh.240,000. (2 marks) b) Briefly describe the nine steps in developing an operating budget. (4Marks)
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen