The Company LATES Inc. is a recent company which developed and launched the manufacturing of a High-tech car engine. The product requires :

-Raw materials : 4 kg at the unit price of 40/ kg

-Direct labor : 1 hour at the unit price of 140 / hour

Indirect costs come from 2 workshops : WS1 Manufacturing and WS2 Assembly.

The company expected to sell 5000 engines at a unit selling price estimated 400 .

Questions :

1- Please draw up the Budget of manufacturing costs

Amount in

Raw materials

160

Direct labour

140

Indirect costs

variable

fixed

TOTAL BUDGETED COSTS

2- How much is the standard cost of 1 engine?

12,5

Answer :

3- How much is the expected margin? What do you think about it?

Answer :

4- Supposing that sales are regular, and that the company closes during the month of July, when the breakeven should be reached?

Answer :