1. A company annually manufactures 10,000 units of a product at a cost of Rs. 4 per unit andthere is home market for consuming the entire volume of production at the sale price of Rs.4.25 per unit.In the year 2022, there is a fall in the demand for home market which can consume 10,000 unitsonly at a sale price of Rs 3.72 per unit. The analysis of the cost per 10,000 units is:• Materials Rs.15,000• Wages 11.000•Fixed overheads 8,000• Variable overheads 6,000The foreign market is explored and it is found that this market can consume 20,000 units of theproduct if offered at a sale price of Rs. 3.55 per unit. It is also discovered that for additional10,000 units of the product (over initial 10.000 units) that fixed overheads will increase by 10 percent. Is it worthwhile to try to capture the foreign market?

In considering whether to enter the foreign market, it's crucial to weigh the costs and benefits.…

Answered: 1. A company annually manufactures…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A certain factory produces 2000 Ton per year of its product. Th price of one kilogram is 1.8$. The annual direct production cost is 2million $ when the factory works at its whole capacity. Other fixed costs are 7X10^5 b) If the selling price increases by 10% calculate the increase in the net profit at the whole capacity assuming the taxes are 48% of the gross profit.
An annual fixed operating cost of P10,000,000 is incurred by a Auto Devices Manufacturing Company. Each device costs P1,375 to create and sells for P4,500. What is the annual break-even sales units for the manufacturer?
2. Annually (10000) units of a product are sold at a price of (12$) per unit, the amount of fixed costs is ($40000) and the annual profit is (30000$). The management of the producing company was presented with a new design that increases fixed costs by (10%) and variable costs by (20%), in return for increasing sales to reach (12,000) annual units. At what price must the product be sold in order for the profit to increase by a third? What is the volume of production at which the realized returns will be equal to the costs for the two cases?
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Agta Enterprises manufactures a product that sells for R180 each. The company presently produces and sells 50 000 units per year. Unit variable manufacturing and selling expenses are R90 and R18 respectively. Annual fixed costs are R2 200 000 for manufacturing overheads and R1 040 000 for selling and administrative activities. Determine the sales quantity required in order to achieve the company’s profit objective of R1 800 000.
The following information is related to product A: in 2015, variable cost was Rs 200 per unit and fixed cost was Rs 40 per unit. Production was 1,20,000 units. It is expected that production in 2016 will increase to 1,60,000 units. The variable cost will increase by 25% and fixed cost by 10% in 2016. The amount of fixed cost in 2016 will be- a. Rs 52,80,000 b. Rs 70,40,000 c. Rs 64,00,000 d. Rs 48,00,000
A4
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The Blue Co. will produce 25,000 units of product next year. Variable costs ratio is 70%, while fixed costs will total P85,000. The price of each unit to be sold by the firm to achieve an EBIT of P60,000 is A P19.33 B P17.33 C P33.33 D P3.33
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