The margin of safety in breads per annum. (3
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Coffeecup (Pty) Ltd operates a chain of coffee shops, with each shop making their own breads. The
The following estimates for the new shop are available:
1. Standard price and variable costs:
R per bread
Sales price 20.00
Ingredients (7.00)
Electricity (1.00)
Contribution 12.00
2. Fixed cost per annum:
R
Bread labour 10 000
Shop labour 10 000
Rent of bakery and shop 30 000
Total fixed costs per annum 50 000
3. Budgeted sales per annum are 5 000 breads. Sales occurs evenly throughout the year.
Assume 365 days in a year.
Q.1.4 The margin of safety in breads per annum. (3)
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- Country Diner currently makes cookies for its boxed lunches. It uses 40,000 cookies annually in the production of the boxed lunches. The costs to make the cookies are: A potential supplier has offered to sell Country Diner the cookies for $0.85 each. If the cookies are purchased, 10% of the fixed overhead could be avoided. If Jason accepts the offer, what will the effect on profit be?Emerald Island Company is considering building a manufacturing plant in County Kerry. Predicting sales of 100,000 units, Emerald Isle estimates the following expenses: An Irish firm that specializes in marketing will be engaged to sell the manufactured product and will receive a commission of 10% of the sales price. None of the U.S. home office expense will be allocated to the Irish facility. Required: 1. If the unit sales price is 2, how many units must be sold to break even? (Hint: First compute the variable cost per unit.) 2. Calculate the margin of safety ratio. 3. Calculate the contribution margin ratio.Coffeecup (Pty) Ltd operates a chain of coffee shops, with each shop making their own breads. The management accountant of Coffeecup (Pty) Ltd is reviewing a proposal to open a new shop. The following estimates for the new shop are available: 1. Standard price and variable costs: R per bread Sales price 20.00Ingredients (7.00)Electricity (1.00)Contribution 12.002. Fixed cost per annum: R Bread labour 10 000Shop labour 10 000Rent of bakery and shop 30 000Total fixed costs per annum 50 0003. Budgeted sales per annum are 5 000 breads. Sales occurs evenly throughout the year. Assume 365 days in a year. Required Q.1.5 Coffeecup (Pty) Ltd wants to run a promotion during August. During this month breads will be sold at R18 each. This will lead to a monthly sales increase of 20%. Total fixed costs for August is expected to be R4 500 which will include additional advertising costs. Calculate the total expected profit for August.
- Coffeecup (Pty) Ltd operates a chain of coffee shops, with each shop making their own breads. The management accountant of Coffeecup (Pty) Ltd is reviewing a proposal to open a new shop. The following estimates for the new shop are available: 1. Standard price and variable costs: R per bread Sales price 20.00Ingredients (7.00)Electricity (1.00)Contribution 12.002. Fixed cost per annum: R Bread labour 10 000Shop labour 10 000Rent of bakery and shop 30 000Total fixed costs per annum 50 0003. Budgeted sales per annum are 5 000 breads. Sales occurs evenly throughout the year. Assume 365 days in a year. Required: Calculate the following figures for the proposed new shop. (Round all answers to the nearest constant, i.e. no decimals): Q.1.1 The contribution to sales ratio. Q.1.2 The break‐even point in sales revenue per annum. Q.1.3 The break‐even point in breads sold per annum. Q.1.4 The margin of safety in breads per annum. 1.5. Coffeecup…Coffeecup (Pty) Ltd operates a chain of coffee shops, with each shop making their own breads. The management accountant of Coffeecup (Pty) Ltd is reviewing a proposal to open a new shop. The following estimates for the new shop are available: 1. Standard price and variable costs: R per bread Sales price 20.00Ingredients (7.00)Electricity (1.00)Contribution 12.002. Fixed cost per annum: R Bread labour 10 000Shop labour 10 000Rent of bakery and shop 30 000Total fixed costs per annum 50 000 3. Budgeted sales per annum are 5 000 breads. Sales occurs evenly throughout the year. Assume 365 days in a year. Required: Calculate the following figures for the proposed new shop. (Round all answers to the nearest constant, i.e. no decimals): Q.1.1 The contribution to sales ratio. Q.1.2 The break‐even point in sales revenue per annum. Q.1.3 The break‐even point in breads sold per annum. Q.1.4 The margin of safety in breads per annum.Coffeecup (Pty) Ltd operates a chain of coffee shops, with each shop making their own breads. The management accountant of Coffeecup (Pty) Ltd is reviewing a proposal to open a new shop.The following estimates for the new shop are available:1. Standard price and variable costs:R per breadSales price 20.00Ingredients (7.00)Electricity (1.00)Contribution 12.002. Fixed cost per annum:RBread labour 10 000Shop labour 10 000Rent of bakery and shop 30 000Total fixed costs per annum 50 000 3. Budgeted sales per annum are 5 000 breads. Sales occurs evenly throughout the year.Assume 365 days in a year. Required:Calculate the following figures for the proposed new shop. (Round all answers to the nearestconstant, i.e. no decimals):Q.1.3 The break‐even point in breads sold per annum. Q.1.4 The margin of safety in breads per annum. Q.1.5 Coffeecup (Pty) Ltd wants to run a promotion during August. During this monthbreads will be sold at R18 each. This will lead to a monthly sales increase of…
- Coffeecup (Pty) Ltd operates a chain of coffee shops, with each shop making their own breads. Themanagement accountant of Coffeecup (Pty) Ltd is reviewing a proposal to open a new shop.The following estimates for the new shop are available:1. Standard price and variable costs:R per breadSales price 20.00Ingredients (7.00)Electricity (1.00)Contribution 12.002. Fixed cost per annum:RBread labour 10 000Shop labour 10 000Rent of bakery and shop 30 000Total fixed costs per annum 50 0003. Budgeted sales per annum are 5 000 breads. Sales occurs evenly throughout the year.Assume 365 days in a year.Required:Calculate the following figures for the proposed new shop. (Round all answers to the nearestconstant, i.e. no decimals):Q.1.1 The contribution to sales ratio. (3)Q.1.2 The break‐even point in sales revenue per annum. (3)Q.1.3 The break‐even point in breads sold per annum. (3)Q.1.4 The margin of safety in breads per annum. (3)20 2020© The Independent Institute of Education (Pty) Ltd 2020Page…Please explain the step so I can understand. Gobblecakes is a bakery that specializes in cupcakes. The annual fixed cost to make cupcakes is $18,000. The variable cost including ingredients and labor to make a cupcake is $0.90. The bakery sells cupcakes for $3.20 apiece. (a). If the bakery sells 12,000 cupcakes annually, determine the total cost, total revenue, and profit. (b). How many cupcakes will the bakery need to sell in order to break even?Native Wood Products Ltd sells hand-made coffee tables. The shop owner has divided sales into two categories according to the type of wood used in the tables, as follows: Product type Kahikatea Rimu Sales price $2,000 $1,200 Costs $1,200 $520 Sales commission $100 $60 Seventy percent (70%) of the shop's sales are rimu tables. The shop's annual fixed costs are $161,000. Calculate the weighted average contribution margin, assuming the sales mix stays the same.
- Coffee works Limited manufactures coffee machines for domestic use. The management of the company is considering next year’s production and has asked you to help with certain financial decisions. The following information is available: Selling price (per machine) £80 Direct materials (per machine) £25 Direct labour (per machine) £20 Fixed production overheads £270,000 per year. The company is planning to manufacture 15,000 coffee machines next year. (a) calculate the marginal cost per coffee machine (b) calculate the absorption cost per coffee machine (c) prepare a statement of profit or loss (under marginal and absorption costing method) to show the profit or loss if 15,000 coffee machines are soldHawk Homes, Inc., makes one type of birdhouse that it sells for $29.40 each. Its variable cost is $13.20 per house, and its fixed costs total $14,013.00 per year. Hawk currently has the capacity to produce up to 2,700 birdhouses per year, so its relevant range is 0 to 2,700 houses. Required:1. Prepare a contribution margin income statement for Hawk assuming it sells 1,280 birdhouses this year. 2. Without any calculations, determine Hawk’s total contribution margin if the company breaks even. 3. Calculate Hawk’s contribution margin per unit and its contribution margin ratio. 4. Calculate Hawk’s break-even point in number of units and in sales revenue. 5. Suppose Hawk wants to earn $25,000 this year. Determine how many birdhouses it must sell to generate this amount of profit.Gwen is the managerial accountant in charge of Company A, which sellswater bottles. She previously determined that the fixed costs of Company A consist ofproperty taxes, a lease, and executive salaries, which add up to P500,000. Thevariable cost associated with producing one water bottle is P80 per unit. The waterbottle is sold at a premium price of P500. d. Determine the breakeven quantity and the breakeven sales.e. Use the graphical method to determine the breakeven point.
