The grills were sold 250 AED each and to produce one grill comprises 25AED for material,15AE D/per gril for direct

labour, 30 AED/per grill for variable overhead. The budget for other costs incurred per month are in AED: machine

tian 4

depreciation - 36,000; utilities -11,000; product inspection 5,000, repairs-6,000. The capacity is to produce 6000 grills

nt yot

npwered

Instructions: a) Express mathernatically cost function of the expenses. Estimate the unit cost to produce one grll at ful

Marked out of

10.00

capacity for 6000 grills.

b) What is the contribution margin per grill and how many grills must be sold to breakeven?

P Flag

uestion

c) Are we making loss or profit selling 200 grills or 900 grills, determine how much using CM axiom

D) 200 grill;

) 900 grills:

d) How big sales revenue must be earned to achieve an operating profit AED 240,000?

e) What is the margin of safety ratio assuming 1100 grills are sold? What does it mean?

Is the performance of the division producing grills sufficiently profitable, if the margin of safety ratio (MOS ratio) of division producing fireplaces is 48%?