Maureen is currently looking into a business opportunity that will require her tomanufacture branded match T-shirts for a local cricket club. Although she thinks itmight be a good opportunity, she is a bit wary of accepting the contract as her freetime is limited and she will only be able to produce 100 T-shirts per month.T-shirts will be sold at R200 each to club members.pendent institute of tducation Pty ud 2020The costs associated with the opportunity are as followsDescriptionCostsCost of material for T-shirtR40 per shirtCost of printingRS per shirtLabour costsR25 per shirtVariable overhead costsR10 per shirtFixed overhead costsRIS 000 per monthRequired:Calculate the break even point in units and advise Maureen whether she shouldtake up the opportunity or not Provide a reason for your answer.

Break-even simply refers to covering all our costs without making a profit. It is a point at which a…

Answered: Maureen is currently looking into a…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 6PB: Karens Quilts is considering the purchase of a new Long-arm Quilt Machine that will cost $17,500 and...

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Maureen is currently looking into a business opportunity that will require her to manufacture branded match T‐shirts for a local cricket club. Although she thinks it might be a good opportunity, she is a bit wary of accepting the contract as her free time is limited and she will only be able to produce 100 T‐shirts per month.T‐shirts will be sold at R200 each to club members.© The Independent Institute of Education (Pty) Ltd 2020Page 7 of 11 19; 20 2020The costs associated with the opportunity are as follows.DescriptionCost of material for T‐shirt Cost of printingLabour costsVariable overhead costs Fixed overhead costsRequired:CostsR40 per shirtR5 per shirtR25 per shirtR10 per shirtR15 000 per monthCalculate the break even point in units and advise Maureen whether she should take up the opportunity or not. Provide a reason for your answer.
Maureen is currently looking into a business opportunity that will require her tomanufacture branded match T‐shirts for a local cricket club. Although she thinks itmight be a good opportunity, she is a bit wary of accepting the contract as her freetime is limited and she will only be able to produce 100 T‐shirts per month.T‐shirts will be sold at R200 each to club members. The costs associated with the opportunity are as follows. Description CostsCost of material for T‐shirt R40 per shirtCost of printing R5 per shirtLabour costs R25 per shirtVariable overhead costs R10 per shirtFixed overhead costs R15 000 per month Required:Calculate the break even point in units and advise Maureen whether she shouldtake up the opportunity or not. Provide a reason for your answer.
CompanyX, a small (fictitious) company, is considering switching to the 2-year Acme2 battery for the smartphones it issues to employees. CompanyX supplies 1 phone each to 100 employees. The battery that CompanyX currently uses lasts 1 year, costs CompanyX $50 for the battery itself, and costs CompanyX $60 in labor to replace each battery. Assume the replacement labor cost stays constant no matter what battery is used. What is the VIU price for the Acme2 battery in this application? HINT: First, calculate the current annual cost related to batteries, and then set that amount to the VIU cost equation, including parts and labor. $160 $110 $50 $42.50
Variety Artisans has a bottleneck in their production that occurs within the engraving department. Arjun Naipul, the COO, is considering hiring an extra worker, whose salary will be $45,000 per year, to solve the problem. With this extra worker, the company could produce and sell 3,500 more units per year. Currently, the selling price per unit is $18 and the cost per unit is $5.85. Using the information provided, calculate the annual financial impact of hiring the extra worker.
Artisan Metalworks has a bottleneck in their production that occurs within the engraving department. Jamal Moore, the COO, is considering hiring an extra worker, whose salary will be $55,000 per year, to solve the problem. With this extra worker, the company could produce and sell 3,000 more units per year. Currently, the selling price per unit is $25 and the cost per unit is $7.85. Using the information provided, calculate the annual financial impact of hiring the extra worker.
Garrison Boutique, a small novelty store, just spent $4,000 on a new software program that will help in organizing its inventory. Due to the steep learning curve required to use the new software, Garrison must decide between hiring two part-time college students or one full-time employee. Each college student would work 20 hours per week, and would earn $1 S per hour. The full-time employee would work 40 hours per week and would earn $15 per hour plus the equivalent of $2 per hour in benefits. Employees are given two polo shirts to wear as their uniform. The polo-shirts cost Garrison $10 each. What are the relevant costs, relevant revenues, sunk costs, and opportunity costs for Garrison?
Karens Quilts is considering the purchase of a new Long-arm Quilt Machine that will cost $17,500 and will increase her fixed costs by $119. What would happen if she purchased the new quilt machine to realize the variable cost savings of $5.00 per quilt, and what would happen if she raised her price by just $5.00? She feels confident that such a small price increase will not decrease the sales in units that will help her offset the increase in fixed costs. Given the following current prices how would the break-even in units and dollars change? Complete the monthly contribution margin income statement for each of these cases.
A potential supplier has offered to sell Reuben the rolls for $0.90 each. If the rolls are purchased, 30% of the fixed overhead could be avoided. If Reuben accepts the offer, what will the effect on profit be? Increase in profit of $1,600 if he buys the rolls Increase in profit of $1,200 if he buys the rolls Decline in profit of $1,200 if he buys the rolls Decline in profit of $1,600 if he buys the rolls
Maureen has decided to produce and sell cricket bats in her spare time. She has a shaded area that was constructed at a cost of R68 000 several years ago, and which will be used for production purposes. Maureen has determined that each cricket bat will require R300 in wood and grip of R60. Other minor expenses like varnish and stickers is estimated to be R10 per bat in total. She will hire students to do most of the work and pay them R350 for each cricket bat completed. She will rent tools at a cost of R2 000 per month. The total monthly electricity bill is R1 500. It is estimated that 40% of this is attributable to the production of the cricket bats and the remainder is for Maureen’s personal use and is paid in her personal capacity. Maureen has drawn R48 000 out of her savings account to provide the capital needed to get the operation going. The savings were earning interest at 6% annually. An advertising agency will handle advertising at a cost of R1 000 per month. Maureen will hire…
Maureen has decided to produce and sell cricket bats in her spare time. She has a shaded area that was constructed at a cost of R68 000 several years ago, and which will be used for production purposes. Maureen has determined that each cricket bat will require R300 in wood and grip of R60. Other minor expenses like varnish and stickers is estimated to be R10 per bat in total. She will hire students to do most of the work and pay them R350 for each cricket bat completed. She will rent tools at a cost of R2 000 per month. The total monthly electricity bill is R1 500. It is estimated that 40% of this is attributable to the production of the cricket bats and the remainder is for Maureen’s personal use and is paid in her personal capacity. Maureen has drawn R48 000 out of her savings account to provide the capital needed to get the operation going. The savings were earning interest at 6% annually. An advertising agency will handle advertising at a cost of R1 000 per month. Maureen will hire…
Maureen has decided to produce and sell cricket bats in her spare time. She has a shaded area that was constructed at a cost of R68 000 several years ago, and which will be used for production purposes. Maureen has determined that each cricket bat will require R300 in wood and grip of R60. Other minor expenses like varnish and stickers is estimated to be R10 per bat in total. She will hire students to do most of the work and pay them R350 for each cricket bat completed. She will rent tools at a cost of R2 000 per month. The total monthly electricity bill is R1 500. It is estimated that 40% of this is attributable to the production of the cricket bats and the remainder is for Maureen’s personal use and is paid in her personal capacity. Maureen has drawn R48 000 out of her savings account to provide the capital needed to get the operation going. The savings were earning interest at 6% annually. An advertising agency will handle advertising at a cost of R1 000 per month. Maureen will hire…
Maureen has decided to produce and sell cricket bats in her spare time. She has a shaded area that was constructed at a cost of R68 000 several years ago, and which will be used for production purposes. Maureen has determined that each cricket bat will require R300 in wood and grip of R60. Other minor expenses like varnish and stickers is estimated to be R10 per bat in total. She will hire students to do most of the work and pay them R350 for each cricket bat completed. She will rent tools at a cost of R2 000 per month. The total monthly electricity bill is R1 500. It is estimated that 40% of this is attributable to the production of the cricket bats and the remainder is for Maureen’s personal use and is paid in her personal capacity. Maureen has drawn R48 000 out of her savings account to provide the capital needed to get the operation going. The savings were earning interest at 6% annually. An advertising agency will handle advertising at a cost of R1 000 per month. Maureen will hire…

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