REQUIRED: 1. Calculate the breakeven point both in sales volumes (number of pockets) and sales value. 2. Calculate the margin of safety both in percentage and in volume. 3. Suppose the selling price per pocket of cement was to be increased to K375 and the sales commission increased to 8% and a further K150,000 on advertising. Calculate the revised breakeven point sales volume based on suggestion in (3) above and comment accordingly
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- Suppose that a company is spending 60,000 per year for inspecting, 30,000 for purchasing, and 40,000 for reworking products. A good estimate of nonvalue-added costs would be a. 70,000. b. 130,000. c. 40,000. d. 90,000. e. 100,000.Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead costs per month include supervision of 98,000, depreciation of 76,000, and other overhead of 245,000. Required: 1. Prepare a flexible budget for all costs of production for the following levels of production: 160,000 units, 170,000 units, and 175,000 units. 2. What is the per-unit total product cost for each of the production levels from Requirement 1? (Round each unit cost to the nearest cent.) 3. What if Nashler Companys cost of maintenance rose to 0.22 per unit? How would that affect the unit product costs calculated in Requirement 2?Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4.000 units were produced: Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next years production. Cory Corporation has offered to supply 6,000 units of part A at a price of $7.00 per unit. It Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided. Should Gent Designs accept the offer from Cory Corporation?
- The following product Costs are available for Haworth Company on the production of chairs: direct materials, $15,500; direct labor, $22.000; manufacturing overhead, $16.500; selling expenses, $6,900; and administrative expenses, $15,200. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 7,750 equivalent units are produced, what is the equivalent material cost per unit? If 22,000 equivalent units are produced, what is the equivalent conversion cost per unit?Company A produces a component used in the production of one of the company’s main products.The costs are budgeted as follows:Amount per unit (R) Amount per 5 000 units (R)Materials 5 25 000Labour 15 75 000Variable overhead 10 50 000Depreciation 4 20 000Allocated general overhead 12 60 000Total cost 46 230 000The components can be purchased from an outside supplier at a cost of R35 per unit. Determine whether the company should make or buy the component. In arriving at your solution clearly show all your workings.Based on the expected sales volume of 2 400 units, determine the sales price per unit (expressedin rands and cents) that will enable the company to break even. INFORMATIONSamcor Limited manufactures tables. The following information was extracted from the budget for the year ended 30 June 2022:1. Total production and sales 2 400 units2. Selling price per table R1 2003. Variable manufacturing costs per table:Direct material R288Direct labour R192Overheads R964. Fixed manufacturing overheads R216 9605. Other costs:Fixed marketing and administrative costs R144 000Sales commission 5%
- The Tokyo Division of Toy King manufactures “Togo Toy” and sells them in the Japanese market for P6,000 each. The following data are from the Tokyo Division’s 2018 budget: Variable Cost P3,800 per unit Fixed Overhead P6,080,000 Total Assets P12,500,000 Toy King has instructed the Tokyo Division to budget a rate of return on total assets (before taxes) of 20%. Assume that only 2,400 units can be sold in the Japanese market. However, another 1,400 units can be sold to the American Marketing Division of Toy King. The Tokyo manager has offered to sell the 1,400 units for P5,500 each. The American Marketing Division manager has countered with an offer to pay P5,000 per unit, claiming that she can subcontract production to an American producer at a cost equivalent to P5,000. The Tokyo manager knows that if his production falls to 2,400 units he could eliminate some assets, reducing total assets to P10…JKL Ltd has prepared the following cost estimates for the manufacture of a subassembly component based on an annual production of 8000 units: Direct materials Direct labour Variable labour Fixed overhead applied (150% direct labour cost) Total Per Unit $ 10 8 8 12 38 Total $80,000 64,000 64,000 96,000 304,000 The supplier has offered the subassembly at a price of $32 each. Two thirds of fixed factory overhead, which represents executive salaries, rent, depreciation, and taxes, continue regardless of the decision. 1. Should the company buy or make the product? Give two (2) reasons to support your decision . Answer with calculations. 2. Explain the concept of opportunity cost used in relevant Give an example: 3. Outline two (2) qualitative factors affecting decision to drop a product line or eliminate a departmentYou have collected the standard cost card for one unit of the ‘Zeus’ which was in operation in the just ended period, details of which follow below: K Materials 7kg at K35.00 245.00 Labour 20 hours at K12.00 240.00 Variable overheads 20 hours at K8.00 160.00 Fixed overheads 20 hours at K15.00 300.00 945.00 Selling price 1,500.00 Profit…
- Kirchoff.,manufactures a product with the following costs:Direct materials 18.00Direct labor 11.90Variable manufacturing overhead 2.10Fixed manufacturing overhead 1,422,000Variable SG&A expenses 3.60Fixed SG&A expenses 1,540,500The pricing are based on budgeted production and sales of 79,000 units per year. Required: Determine the selling price per unit, assuming a mark-up of 25% drsired under each of the following methods:1. Differential cost2. Minimum price allowedThe West Company’s cost structure for a certain items at a level of 20,000 units per month are as follows: Manufacturing Costs: Direct Material 1.00 Direct Labor 1.20 Variable indirect cost .80 Fixed indirect cost .50 Selling and other: Variable 1.50 Fixed .90 Required: Determine the selling price if the company is planning to set up a selling price with a mark-up of 60% based on prime costs.Mercury Bowie Sdn Bhd manufactures two products, the Y and the Z, which have the following standard selling price and standard costs per unit. Y Z RM RM Standard Selling Price 110 118 Direct Materials (RM4 per kg) 32 16 Direct Labour (RM10 per direct labour hour) 60 80 Variables Overhead (RM1 per machine hour) 4 6 During the next accounting period, the availability of resources are expected to be subjects to the following limitations: Direct Materials 3440 kg Direct Labour Hours 2880 hours Machine capacity 2760 hours The marketing department estimated that the maximum sales potential for product Y is limited to 420 units. There is no sales limitation for product Z. You are asked to advise how these limited facilities and resources can best be used so as to gain the optimum benefit from them. Required: a.Determine by graphical means the optimal mix of Y and Z at Mercury Bowie Bhd Sdn…