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.

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.

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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