Carbondale Corporation is a manufacturer of converters sold on a private label basis to large discount chains. The company has capacity to produce 45,000 converters a year. Planned production for the current year is 20,000 units and involves working the plant for a single shift. An analysis of the company’s cost records reveals the following information for the 20,000 units production level: Variable manufacturing cost per unit:                                                Ksh 8 Variable Selling and Administration costs per unit:              Ksh2 Fixed manufacturing costs:                                                    Ksh60, 000 Fixed Selling and Administration costs:                                Ksh40, 000 Current selling price per unit:                                                 Ksh18     1.Determine the breakeven point in units and value             2.Plot the cost-volume-profit chart

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
icon
Related questions
Question

Carbondale Corporation is a manufacturer of converters sold on a private label basis to large discount chains. The company has capacity to produce 45,000 converters a year. Planned production for the current year is 20,000 units and involves working the plant for a single shift. An analysis of the company’s cost records reveals the following information for the 20,000 units production level:

Variable manufacturing cost per unit:                                                Ksh 8

Variable Selling and Administration costs per unit:              Ksh2

Fixed manufacturing costs:                                                    Ksh60, 000

Fixed Selling and Administration costs:                                Ksh40, 000

Current selling price per unit:                                                 Ksh18

 

 

1.Determine the breakeven point in units and value            

2.Plot the cost-volume-profit chart 

Expert Solution
trending now

Trending now

This is a popular solution!

video

Learn your way

Includes step-by-step video

steps

Step by step

Solved in 4 steps with 4 images

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials Of Investments
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
FUNDAMENTALS OF CORPORATE FINANCE
FUNDAMENTALS OF CORPORATE FINANCE
Finance
ISBN:
9781260013962
Author:
BREALEY
Publisher:
RENT MCG
Financial Management: Theory & Practice
Financial Management: Theory & Practice
Finance
ISBN:
9781337909730
Author:
Brigham
Publisher:
Cengage
Foundations Of Finance
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education