Quiz na Question 1 Not yet answered 2 Marked out of 10.00 Finish att P Flag question Time left CVP analysis The lamps were sold 180 AED each and to produce one lamp comprises 35AED for material, 15AED lamp for direct labour, 30 AED for variable overhead. The budget for other costs incurred per month are in AED: machine depreciation - 44,000; maintenance and repairs -12,000; property tax 9,000, Utilities - 5,000. The capacity is to produce 4000 lamps. Instructions: a) Express mathematically cost function of the expenses. Estimate the unit cost to produce one lamp at full capacity for 4000 lamps.[2p] b) What is the contribution margin per lamp, CM ratio and how many lamps must be sold to breakeven? [2p] c) What is the unit cost (to produce one lamp) at BE point. Comment on the difference comparing unit cost at BE point and at full capacity.[3p] d) Are we making loss or profit selling 400 lamps or 800 lamps, determine how much using CM axiom.? i) 400 lamp: [10] ii) 800 lamps:[1p] e) How big sales revenue must be earned to achieve an operating profit AED 150,000? [1p] f) Calculate margin of safety (MOS) if we produce 1600 lamps, is this division doing better than chandeliers division with MoS equal 52%? [bonus 2p] Formulas: Targeted Ol in quantity = (FC+ TOI)/ CMu Targeted Ol in , $, AED = (FC+ TOI)/ CMR CMR= CMu/SP MoS ratio= (Current sales (Budgeted sales) - BE sales)/ Current Sales