Accounting Management: Cost Classification and Ethics

1- The total unit cost = Total Variable Cost + Production Fixed Expenses + Advertising Expense + Selling and Administrative Expense = 3.23 + 1.20 + 0.30 + 0.19 = 4.92.

Based on Exhibit 5, we will be able to realise break even sales within a year.

One of specialty’s managers felt that the profit potential was so great that the order quantity should have a 70% chance of meeting demand and only a 30% chance of any stock-outs. What quantity would be ordered under this policy, and what is the projected profit under the three sales scenarios?

1. For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units?

Determine the unit break-even point, assuming fixed costs are $60,000 per period, variable costs are $16.00 per unit, and the sales price is $25.00 per unit.

20. What is the term for the extra revenue derived from the sale of one more unit?

Because each product has a different contribution margin percentage, the volume required for each break-even point would be different and will not add up to the company’s overall break-even volume of 1,100,000 units; the overall break-even volume assumes that there is only one contribution margin percentage which is :

Assume that next year management wants the company to earn a minimum profit of $162,000. How many units be sold to meet this target profit figure? [3 points]

In our second assumption, instead of using the cost of goods per cases in 1986, we try to use the percentage it counts in the total expenses which is 50.4% and to find the sales needed to break-even. The detail of the calculation is shown in the answer for questions d. The result is that 95,635, a little bit higher than the estimated sales of 90,000.

Total Sales Dollars (for covering each incremental dollar of advertising) = $200,000 / $150,000 = $1.33

The amount of extra sales that would be required to cover this cost of 300,000 would be

(b) How many units will Yabba have to sell next year in order for it to achieve the same profit that it did this year?

The revenue is $600,600*1.2= $720,720. The variable cost changes as sales increases and fixed cost stays the same, the gross profit is $175,500. After tax, the net income is $100,557.

8. Amadon Corporation manufactures and sells a single product. The company uses units as the measure of

A result on the next page shows that at sales price of $21.50, the sales quantity rises to 1,140,085 units and net profit turns to positive for the first time. Besides, if a company continues to reduce the price further, at the point of $15.50, it is where the company’s profit on product 101 is in the highest position as it gives the net profit of $3,901,908.