The Safeer Company manufactures and sells a single product. Price and cost data on product and operations are Selling price per unit Variable cost per unit Rs.25.00 Annual fixed costs Manufacturing overhead Selling and administrative Direct materials Rs.192,000 276,000 Rs.11.00 Direct labor 5.00 Manufacturing overhead Selling expenses Forecasted annual sales volume Rs.3,000,000 2.50 1.30 REQUIRED: 1. Safeer's breakeven point in units. 2. How many units Safeer must sell to earn Rs.156,000 of operating income. 3. Safeer estimates that its direct labor costs will increase by 8% next year. How many units must Safeer sell next year to reach the breakeven point? 4. If Safeer's direct labor cost increase by 8%, what must the selling price per unit of product be to maintain the same contribution margin ratio? 5. Calculate breakeven point in units, If Safeer's direct labor cost increase by 8% and manufacturing fixed cost to Rs.150,000.
The Safeer Company manufactures and sells a single product. Price and cost data on product and operations are Selling price per unit Variable cost per unit Rs.25.00 Annual fixed costs Manufacturing overhead Selling and administrative Direct materials Rs.192,000 276,000 Rs.11.00 Direct labor 5.00 Manufacturing overhead Selling expenses Forecasted annual sales volume Rs.3,000,000 2.50 1.30 REQUIRED: 1. Safeer's breakeven point in units. 2. How many units Safeer must sell to earn Rs.156,000 of operating income. 3. Safeer estimates that its direct labor costs will increase by 8% next year. How many units must Safeer sell next year to reach the breakeven point? 4. If Safeer's direct labor cost increase by 8%, what must the selling price per unit of product be to maintain the same contribution margin ratio? 5. Calculate breakeven point in units, If Safeer's direct labor cost increase by 8% and manufacturing fixed cost to Rs.150,000.
Chapter5: Process Costing
Section: Chapter Questions
Problem 2PB: The following product costs are available for Kellee Company on the production of eyeglass frames:...
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