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You are doing a cost-volume-profit analysis for the Ackee Company. Presented below is cost data for the cost data for the company and represents the
You are doing a cost-volume-profit analysis for the Ackee Company. Presented below is cost data for the cost data for the company and represents the monthly average of the previous 12 months of data. Assume that all units produced in any one month are sold in the same month. Some knowledge required to solve this problem was learned in chapter 2. Assume that this month is average (All numbers in current month match 12 month averages) 1) Classify each of the cost as either fixed or variable cost. 2) Classify each of the cost as either product or period cost. 3) Classify each product cost as either direct material, direct labor or manufacturing overhead. 4) Produce a Contribution Margin Income Statement for the month. 5) What is the Prime Cost? 6) What is the Conversion Cost? 7) Calculate Break-Even sales in units sold. 8) What is the Margin of Safety Percentage? 9) What is the Degree of Operating Leverage? 10) Your company would like to increase Net Operating Income by 10%. How many more units must they sale to achieve this goal
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