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Snow Board Corporation produces a single model of X-Box and sells each model for $250. Current annual production and sales is 1,500 X-Boxes. The corporation
Snow Board Corporation produces a single model of X-Box and sells each model for $250. Current annual production and sales is 1,500 X-Boxes. The corporation fixed costs is $100,000 Other cost information is as follows: Costs Per Unit Direct material costs UNIT COST $ 80 Direct labour costs $ 50 Variable manufacturing overhead $ 20 Fixed manufacturing overhead $100 Total costs $250 Required [Show all formulas and workings] a) Calculate the firm breakeven point in dollars. b) Calculate the firm margin of safety in dollars. (5 Marks) [3 Marks] c) Calculate the number of units the firm must produce and sell to earn an operating profit of $10,000. [3 Marks] d) Prepare a contribution format income statement to show how much profit will change if the sales price increase by 10%, direct material costs decrease by $10 per unit and fixed costs increased to $122,000. (5 Marks) e) Refer to the original data in the above table. Calculate the firm degree of operating leverage [4 marks]
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