22. SecuriPrint Ltd produces pre-printed cheques for customers to use in automated account payable departments. The cheques include personalised customer details. A new customer has ordered a batch of 3,000 cheques. The following data illustrate SecuriPrint’s cost for a typical batch of 1,000 cheques: Variable materials Variable wages Machine set up (fixed per batch *) Design and artwork (fixed per batch *) £ 72.00 24.00 7.20 36.00 139.20 * The design and machine set up costs are fixed per batch regardless of the batch size. SecuriPrint absorbs production overhead at a rate of 10% of variable wages cost. A further 5% is added to the total production cost of each batch to allow for selling, distribution and administration overhead. SecuriPrint requires a profit margin of 40% of sales value. The selling price for a batch of 3,000 cheques should be: a) £743.40 b) £592.20 c) £579.60 d) £497.45

22. SecuriPrint Ltd produces pre-printed cheques for customers to use in automated account payable departments. The cheques include personalised customer details. A new customer has ordered a batch of 3,000 cheques. The following data illustrate SecuriPrint’s cost for a typical batch of 1,000 cheques: Variable materials Variable wages Machine set up (fixed per batch ) Design and artwork (fixed per batch ) £ 72.00 24.00 7.20 36.00 139.20 * The design and machine set up costs are fixed per batch regardless of the batch size. SecuriPrint absorbs production overhead at a rate of 10% of variable wages cost. A further 5% is added to the total production cost of each batch to allow for selling, distribution and administration overhead. SecuriPrint requires a profit margin of 40% of sales value. The selling price for a batch of 3,000 cheques should be: a) £743.40 b) £592.20 c) £579.60 d) £497.45

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 28E

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SecuriPrint Ltd produces pre-printed cheques for customers to use in automated account payable departments. The cheques include personalised customer details. A new customer has ordered a batch of 3,000 cheques. The following data illustrate SecuriPrint’s cost for a typical batch of 1,000 cheques: Variable materialsVariable wagesMachine set up (fixed per batch *) Design and artwork (fixed per batch *) £ 72.00 24.00 7.20 36.00 139.20 * The design and machine set up costs are fixed per batch regardless of the batch size. SecuriPrint absorbs production overhead at a rate of 10% of variable wages cost. A further 5% is added to the total production cost of each batch to allow for selling, distribution and administration overhead. SecuriPrint requires a profit margin of 40% of sales value. The selling price for a batch of 3,000 cheques should be: a) £743.40 b) £592.20 c) £579.60 d) £497.45
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RantauBags Company plans to sell 10,000 handbags at $400 each in the coming year. Data on cost per handbag are as follows: Direct materials $80Direct labour $125Variable overhead $15Variable selling expense is a commission of 5 per cent of the sales price. Total fixed factory overhead amounts to $800,000. Fixed selling and administrative expense totalled $400,000. Required: (a) Prepare a contribution margin income statement for RantauBags for the coming year.(b) What is the effect on RantauBags operating income if 13,000 units are manufactured and sold next year? Show computation.(c) Calculate the number of units RantauBags must sell to breakeven.(d) Calculate the number of units RantauBags must sell to achieve a target operating income of $240,000.(e) Calculate the margin of safety in sales ($) for the coming year.(f) Discuss TWO benefits of manager's possessing the knowledge/understanding on cost-volume-profit analysis.
Umdloti Ltd, which manufactures liquid hand soap, commenced operations on 01 November 2021. Standard production for a typical month is expected to be 160 000 bottles. During November 2021 the company manufactured 170 000 bottles of hand soap. On 30 November 2021 there were 46 000 bottles of hand soap in inventory. Manufacturing and commercial costs during November 2021 were as follows: Direct materials R212 500 Direct labour R680 000 Variable manufacturing overheads R37 400 Variable marketing costs R135 160 Fixed administration costs R84 320 Fixed manufacturing overheads R113 900 The hand soap was sold at R12 per bottle during November 2021. During December 2021, Umdloti Ltd decided to increase the selling price by 10% because the fixed manufacturing costs increased by R27 100 and the variable marketing costs increased by R0.11 per unit sold with effect from 01 December 2021. The company manufactured 150 000 bottles of hand soap during December 2021. There were 27 000 bottles…
Umdloti Ltd, which manufactures liquid hand soap, commenced operations on 01 November 2021. Standard production for a typical month is expected to be 160 000 bottles. During November 2021 the company manufactured 170 000 bottles of hand soap. On 30 November 2021 there were 46 000 bottles of hand soap in inventory. Manufacturing and commercial costs during November 2021 were as follows: Direct materials R212 500 Direct labour R680 000 Variable manufacturing overheads R37 400 Variable marketing costs R135 160 Fixed administration costs R84 320 Fixed manufacturing overheads R113 900 The hand soap was sold at R12 per bottle during November 2021. During December 2021, Umdloti Ltd decided to increase the selling price by 10% because the fixed manufacturing costs increased by R27 100 and the variable marketing costs increased by R0.11 per unit sold with effect from 01 December 2021. The company manufactured 150 000 bottles of hand soap during December 2021. There were 27 000 bottles of hand…