An energy company working in power supply project having the following cost: Material: $ 200,000 Labour: $ 112,000 Subcontractor: $ 325,000 Equipment operation cost : $ 280,000 (within fuel cost) Others: $ 35,000 Fixed Overhead: $ 27,000 Variable Overhead: $ 13,000 The revenue is ($ 1,175,00o). The profit percent stated by top management is 15% from total investment for each project and minimum contribution margin is ($ 180,000). Find if the project is at company target or not.

An energy company working in power supply project having the following cost: Material: $ 200,000 Labour: $ 112,000 Subcontractor: $ 325,000 Equipment operation cost : $ 280,000 (within fuel cost) Others: $ 35,000 Fixed Overhead: $ 27,000 Variable Overhead: $ 13,000 The revenue is ($ 1,175,00o). The profit percent stated by top management is 15% from total investment for each project and minimum contribution margin is ($ 180,000). Find if the project is at company target or not.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 2CMA

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