Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sibon ple manufactures soft toys for the European market. The costs incurred by the firm are as follows: Materials (per toy) Wages (per toy)

image

Sibon ple manufactures soft toys for the European market. The costs incurred by the firm are as follows: Materials (per toy) Wages (per toy) Packaging (per toy) Rent of premises Machinery hire Marketing and administration 5 4 3 5,000 3,000 1.000 The soft toys sell for an average price of $15. The company's capacity of Sibon plc is 2,000 toys per year. Required 1- Calculate the variable costs and the fixed costs. (2 points) 2- Calculate the margin of safety. (1 point) 3- When the business breaks-even, what it the total revenue? (2 points) 4- Is the capacity of the business aligned with the potential breakeven point in quantity? Explain your answer based on the given and your previous answers. (2 points)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

1 Variable costs per toy are the costs that vary with the level of production which are the costs of ... 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

Fundamentals of Cost Accounting

Authors: William Lanen, Shannon Anderson, Michael Maher

3rd Edition

9780078025525, 9780077517359, 77517350, 978-0077398194

More Books

Students also viewed these Accounting questions

Question

In Exercises find dy/dx by implicit differentiation. xy - y = x

Answered: 1 week ago