Castleton company has analyzed the costs of producing and selling 5,000 units of its sole product to be sold as follows: Direct materials...................................................................Rs. 60,000 Direct labor................................................................................ 40,000 Variable factory overhead ......................................................... 20,000 Fixed factory overhead.............................................................. 30,000 Variable marketing and administrative expenses...................... 10,000 Fixed marketing and administrative expenses........................... 15,000 Required: i) Compute the number of units to break even at a per unit sales price of Rs.38.50 ii) Determine the number of units that must be sold to produce an Rs.18,000 profit at a Rs.40 per unit sales price iii) Determine the price castleton must charge at a 5000 unit sales level, in order to get a profit equal to 20% of sales.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Castleton company has analyzed the costs of producing and selling 5,000
units of its sole product to be sold as follows:
Direct materials...................................................................Rs. 60,000
Direct labor................................................................................ 40,000
Variable factory overhead ......................................................... 20,000
Fixed factory overhead.............................................................. 30,000
Variable marketing and administrative expenses...................... 10,000
Fixed marketing and administrative expenses........................... 15,000
Required:
i) Compute the number of units to break even at a per unit sales price of
Rs.38.50
ii) Determine the number of units that must be sold to produce an
Rs.18,000 profit at a Rs.40 per unit sales price
iii) Determine the price castleton must charge at a 5000 unit sales level, in
order to get a profit equal to 20% of sales.
b) Make a comparative study of process costing and job order costing?

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