A. Continental Tyre Corporation is capable of producing 30,000 units of tyres per month.Below is information on production costs at the production levels of 10,000 units and20,000 units.Production levelCost per unitCostbehaviour10,00020,000Cost Element10,000 units 20,000 unitsunitsunitsDirect MaterialsRM 4RM 4VARIABLERM40,000RM80,000COSTDirect LaborRM 6RM 6VARIABLERM60,000RM120,000COSTIndirect MaterialsRM 2RM 2VARIABLERM20,000RM40,000COSTFactory UtilitiesRM 1.2 RM 0.9MIXEDRM12,000RM18,000COSTFactory RentalRM 2RM 1FIXEDRM20,000RM20,000COSTRM 2.4 RM 1.2FactoryEquipmentDepreciationFIXEDCOSTRM24,000RM24,000 ii.Separate (CLO 3, C4) fixed cost and variable cost for cost elements that havemixed cost behaviour using the high-low method and state (CLO 3, C2) thecost function. Estimate (CLO 3, C3) the total cost for this cost element, if theproduction level is 25,000 units.Sketch and label (CLO 3, C2) the graph for each of the following cost items.i)ii)ii)iv)Fixed cost per unitTotal fixed costVariable cost per unitTotal variable costB.

Name: A. Continental Tyre Corporation is capable of producing 30,000 units
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Description: A. Continental Tyre Corporation is capable of producing 30,000 units of tyres per month.Below is information on production costs at the production levels of 10,000 units and20,000 units.Production levelCost per unitCostbehaviour10,00020,000Cost Elem

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Continental Tyre Corporation is capable of producing 30,000 units of tyres per month. Below is information on production costs at the production levels of 10,000 units and 20,000 units. Production level Cost per unit Cost behaviour Cost Element 10,000 units 20,000 units 10,000 units 20,000 units Direct Materials RM 4 RM 4 VARIABLE RM40,000 RM80,000 COST Direct Labor RM 6 RM 6 VARIABLE RM60,000 RM120,000 COST

Continental Tyre Corporation is capable of producing 30,000 units of tyres per month. Below is information on production costs at the production levels of 10,000 units and 20,000 units. Production level Cost per unit Cost behaviour Cost Element 10,000 units 20,000 units 10,000 units 20,000 units Direct Materials RM 4 RM 4 VARIABLE RM40,000 RM80,000 COST Direct Labor RM 6 RM 6 VARIABLE RM60,000 RM120,000 COST

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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