Carbondale Corporation is a manufacturer of converters sold on a private label basis to large discount chains. The company has capacity to produce 45,000 converters a year. Planned production for the current year is 20,000 units and involves working the plant for a single shift. An analysis of the company’s cost records reveals the following information for the 20,000 units production level:Variable manufacturing cost per unit: Ksh 8Variable Selling and Administration costs per unit: Ksh2Fixed manufacturing costs: Ksh60, 000Fixed Selling and Administration costs: Ksh40, 000Current selling price per unit: Ksh18Required:i) Determine the contribution margin and the contribution margin ratio ii) Determine the profits arising from the sales revenue of Ksh 9,000,000 iii) Determine the sales required in units and value to yield a profit of Ksh, 500,000iv) Determine the breakeven point in units and value v) Plot the cost-volume-profit chart
Carbondale Corporation is a manufacturer of converters sold on a private label basis to large discount chains. The company has capacity to produce 45,000 converters a year. Planned production for the current year is 20,000 units and involves working the plant for a single shift. An analysis of the company’s cost records reveals the following information for the 20,000 units production level:
Variable manufacturing cost per unit: Ksh 8
Variable Selling and Administration costs per unit: Ksh2
Fixed
Fixed Selling and Administration costs: Ksh40, 000
Current selling price per unit: Ksh18
Required:
i) Determine the contribution margin and the contribution margin ratio
ii) Determine the profits arising from the sales revenue of Ksh 9,000,000
iii) Determine the sales required in units and value to yield a profit of Ksh, 500,000
iv) Determine the breakeven point in units and value
v) Plot the cost-volume-profit chart
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