A company is producing an identical product in two factories. Following are the details in respect of both the factories : Factory X Factory Y Selling Price per unit Variable Cost per unit Fixed Cost 50 50 40 35 Depreciation included in the above Sales (units) Production Capacity (units) 2,00,000 40,000 30,000 40,000 3,00,000 30,000 20,000 30,000 You are required to determine : (a) Break-Even Point (BEP) for each factory individually. (b) Which factory is more profitable ? (c) Cash BEP for each factory individually. (d) BEP for company as a whole assuming the present product mix is 3 : 2. Note : Indicate BEP in units

A company is producing an identical product in two factories. Following are the details in respect of both the factories : Factory X Factory Y Selling Price per unit Variable Cost per unit Fixed Cost 50 50 40 35 Depreciation included in the above Sales (units) Production Capacity (units) 2,00,000 40,000 30,000 40,000 3,00,000 30,000 20,000 30,000 You are required to determine : (a) Break-Even Point (BEP) for each factory individually. (b) Which factory is more profitable ? (c) Cash BEP for each factory individually. (d) BEP for company as a whole assuming the present product mix is 3 : 2. Note : Indicate BEP in units

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Description: A company is producing an identical product in two factories.Following are the details in respect of both the factories :Factory XFactory YSelling Price per unitVariable CostFixed Cost5050perunit4035Depreciation included in the aboveSales (units)Pro

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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You are informed that a company produces Sulfuric acid by combining two variable factors,labor (L) and Sulphur (S), with one fixed input, capital stock (Ko). The company pays $2 anhour for labor and $1 for Sulphur; the fixed costs associated with its capital stock total $150 a period.a) Write out the general form of the Company's total costsb) Suppose the Company's short-run production function is given by the followingQ=c (L, S, K0) = 2LSWhere each unit of Q represents a thousand products.Determine the minimum total cost at which the company could produce 100,000products.c) To achieve minimum cost, what quantities of labor and plastic would the company haveto use?
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A manufacturing company decides which of three mutually exclusive products to make in its factory on the basis of maximising the company's throughput accounting ratio. Current data for the three products is shown in the following table: Product X Product Y Product Z $20 Selling price per unit $60 $40 Direct material cost per unit $40 $10 $16 Machine hours per unit 10 20 2.5 Total factory costs (excluding direct materials) are $150,000. The company cannot make enough of any of the products to satisfy external demand entirely as machine hours are restricted. Which of the following actions would improve the company's existing throughput accounting ratio? Increase the selling price of product Z by 10% Increase the selling price of product Y by 10% Reduce the material cost of product Z by 5% O Reduce the material cost of product Y by 5%
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ats Assume a company has three products-A, B, and C-that emerge from a joint process. The joint processing costs that are incurred up to the split-off point equal $1,200,000. The selling prices and outputs for each product at the split-off point are as follows: Product A B С Selling Price $33 per pound $29 per pound $24 per pound Product A B C Each product can be processed further beyond the split-off point. The additional processing costs for each product and their respective selling prices after further processing are as follows: Output 14,000 pounds 18,000 pounds 19,000 pounds Additional Processing Costs $65,000 $72,000 $88,000 Selling Price $37 per pound $34 per pound $30 per pound The company is trying to decide whether to retain or discontinue the entire joint manufacturing process. What is the financial advantage (disadvantage) of continuing to operate the entire joint manufacturing process?