Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Topic 3-Cost-Volume-Profit analysi Barossa Bark sells fertilizer for gardens in Tanunda. The company currently only sells 1 type of fertilizer in 10 kg bags. The

image text in transcribedimage text in transcribed

Topic 3-Cost-Volume-Profit analysi Barossa Bark sells fertilizer for gardens in Tanunda. The company currently only sells 1 type of fertilizer in 10 kg bags. The fertlizer is bought from a farmer and repackaged in 10 kg bags before it is sold. The budgeted cost structure of the company is as follows: Cost Fertilizer Packa Labour required to do packaging$30 per hour (9 bags can be Price $1 100 per 500 k $2.40 Fixed overhead costs Rent $20 000 per annum $15 000 per month The fertilizer is sold at $35 per unit (10 kg bag). Barossa Bark is now considering to add soil enhancement to their product range. The soil enhancement can be bought at $2.10 per kilogram. Packaging cost will be $0.50 per bag and labour cost to package each bag will be the same as the labour cost for the fertliser. Soil enhancement will be sold in 3kg bags at a selling price of $20 per bag. If Barossa Bark also starts selling soil enhancement, the sales mix will be twelve units (bags) of fertilizer sold for every sixteen units (bags) of soil enhancement sold. Fixed overheads will increase by $18 000 per annum if soil enhancement is added as a product

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Computers Electronics And High Tech Industry Irs Audit Techniques Guide

Authors: Internal Revenue Service

1st Edition

1304133834, 978-1304133830

More Books

Students also viewed these Accounting questions