Question
The following information relates to La Rouge Perfumes Ltd: Selling price per bottle$225Variable costs per bottle:Direct material$70Direct Labour$35Manufacturing Overhead$15Selling costs$20Total variable costs per bottle$140Annual fixed
The following information relates to La Rouge Perfumes Ltd:
Selling price per bottle$225Variable costs per bottle:Direct material$70Direct Labour$35Manufacturing Overhead$15Selling costs$20Total variable costs per bottle$140Annual fixed costs:Manufacturing Overhead250,000Selling and Administrative250,000Total Fixed costs500,000Forecast annual sales (8500)1912500
NB: As you can't manufacture part of a unit please round your answers up.
1. Break even point in units for La Rouge Perfumes Ltd:(1 mark)(Enter amount only, do not use decimal points or commas)Answer
2. Break-even point in sales dollars forLa Rouge Perfumes Ltd: (1 mark)(Enter amount only, do not use dollar signs, decimal points or commas)Answer
3. How many bottles wouldLa Rouge Perfumes have to sell in order to earn a profit of $795,000? (1 mark)(Enter amount only, do not use decimal points, dollar signs or commas)Answer
4. What is the firm's Safety Margin? (1 mark)(Enter amount only, do not use dollar signs , decimal points or commas)Answer
5. How many bottles wouldLa Rouge Perfumes have to sell in order to earn a profit of $795,000 after tax? Assume La Rouge Perfumes pays income tax of 30%(1 mark)(Enter amount only, do not use dollar signs, decimal points or commas)Answer
6.Management ofLa Rouge Perfumes estimates that the variable manufacturing overhead costs will increase by 10% next year. How many units will the company have to sell next year to reach break-even point? (1 mark)(Enter amount only, do not use dollar signs, decimal points or
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