The Gattonside Gumbo Company Ltd's production capacity is 10 000 Units, and usual

selling price is $10 per unit.

Unit costs are found as follows:

Direct Materials

2 kilograms resin @ $2.05 per kilogram

1 kilogram hardener @ $1.20 per kilogram

Direct Labour

It takes 10 minutes to produce one unit and Direct Wages are

paid at the rate of $12 per hour.

Variable Overheads

$0.90 per unit for the first 8000 units, and

$0.85 per unit for the remainder.

Fixed Overheads

$0.75 per unit at full production.

For

Examiner's

Use

var isIE = false; var f10 = [['t7_10',1358],['ta_10',624],['ts_10',1826],['tt_10',574],['tu_10',652],['tv_10',329],['tw_10',823],['tx_10',886],['ty_10',284],['tz_10',1284],['t10_10',661],['t11_10',414],['t12_10',861],['t13_10',673],['t14_10',358],['t15_10',663]]; function load10(){ var timeout = 100; if (navigator.userAgent.match(/iPhone|iPad|iPod|Android/i)) timeout = 500; setTimeout(function() {adjustWordSpacing(f10);},timeout); } This preview has intentionally blurred sections. Sign up to view the full version.

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11

8706/2/O/N/01

[Turn over

(b)

Using marginal costing, calculate the net profit if

(i)

7500 units are produced and sold;

(ii)

9000 units are produced and sold.

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[7]

(c)

Calculate the number of units required to break even.

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[4]

For

Examiner's

UseThe Gattonside Gumbo Company Ltd's production capacity is 10 000 Units, and usual

selling price is $10 per unit.

Unit costs are found as follows:

Direct Materials

2 kilograms resin @ $2.05 per kilogram

1 kilogram hardener @ $1.20 per kilogram

Direct Labour

It takes 10 minutes to produce one unit and Direct Wages are

paid at the rate of $12 per hour.

Variable Overheads

$0.90 per unit for the first 8000 units, and

$0.85 per unit for the remainder.

Fixed Overheads

$0.75 per unit at full production.

For

Examiner's

Use

var isIE = false; var f10 = [['t7_10',1358],['ta_10',624],['ts_10',1826],['tt_10',574],['tu_10',652],['tv_10',329],['tw_10',823],['tx_10',886],['ty_10',284],['tz_10',1284],['t10_10',661],['t11_10',414],['t12_10',861],['t13_10',673],['t14_10',358],['t15_10',663]]; function load10(){ var timeout = 100; if (navigator.userAgent.match(/iPhone|iPad|iPod|Android/i)) timeout = 500; setTimeout(function() {adjustWordSpacing(f10);},timeout); } This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document

11

8706/2/O/N/01

[Turn over

(b)

Using marginal costing, calculate the net profit if

(i)

7500 units are produced and sold;

(ii)

9000 units are produced and sold.

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[7]

(c)

Calculate the number of units required to break even.

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[4]

For

Examiner's

Use