A factory engaged in manufacturing plastic toys is working at 50% capacity and produces 50,000 toys per month. The present cost break up for one toy is as below. Material : RM80Labour : RM25Overheads : RM50 [60% fixed] The selling price is RM250 per toy. If it is decided to work the factory at 60% capacity, the selling price falls by 8%. At 80% capacity, the selling price falls by 10% accompanied by a similar fall in the price of material Required: Prepare a statement showing the profits/losses at 50%, 70% and 80% capacity utilizations.

A factory engaged in manufacturing plastic toys is working at 50% capacity and produces 50,000 toys per month. The present cost break up for one toy is as below. Material : RM80Labour : RM25Overheads : RM50 [60% fixed] The selling price is RM250 per toy. If it is decided to work the factory at 60% capacity, the selling price falls by 8%. At 80% capacity, the selling price falls by 10% accompanied by a similar fall in the price of material Required: Prepare a statement showing the profits/losses at 50%, 70% and 80% capacity utilizations.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 6EB: Kerr Manufacturing sells a single product with a selling price of $600 with variable costs per unit...

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Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22 each in the coming year. Total variable costs equal 1,086,800. Total fixed costs equal 8,000,000. (Round all ratios to four significant digits, and round all dollar amounts to the nearest dollar.) Required: 1. What is the contribution margin per unit? What is the contribution margin ratio? 2. Calculate the sales revenue needed to break even. 3. Calculate the sales revenue needed to achieve a target profit of 245,000. 4. What if the average price per unit increased to 23.50? Recalculate: a. Contribution margin per unit b. Contribution margin ratio (rounded to four decimal places) c. Sales revenue needed to break even d. Sales revenue needed to achieve a target profit of 245,000
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A factory engaged in manufacturing plastic toys is working at 50% capacity and produces 50,000 toys per month. The present cost break up for one toy is as below. Material : RM80 Labour RM25 Overheads RM50 [60% fixed] : The selling price is RM250 per toy. If it is decided to work the factory at 60% capacity, the selling price falls by 8%. At 80% capacity, the selling price falls by 10% accompanied by a similar fall in the price of material. Required: Prepare a statement showing the profits/losses at 50%, 70% and 80% capacity utilizations.