Question
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:
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.
..........................................................................................................................................
..........................................................................................................................................
..........................................................................................................................................
......................................................................................................................................
[4]
For
Examiner's
Use
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