Question
RJ Ltd manufactures and sells ice cream. The product cost for a unit of ice cream is as follow, Direct Materials $2 Direct Labour $5
RJ Ltd manufactures and sells ice cream. The product cost for a unit of ice cream is as follow,
Direct Materials $2
Direct Labour $5
Variable Overheads $3
Absorbed Fixed Overhead $5
The company expects to incur total fixed cost of $5000 and it had been absorbed based on the expected labour hours of 1000.
The company expects to sell 1500 units at $15 per unit.
You are required to calculate,
- The contribution
- The breakeven point in volume and value
- Contribution to sales ratio
- Margin of safety in volume and as a percentage
- The profit, if the sales value is $18,000
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Accounting What the Numbers Mean
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,
9th Edition
978-0-07-76261, 0-07-762611-7, 9780078025297, 978-0073527062
