Chord Ltd manufactures different types of guitars. Its best seller is the Atlantica. Chord Ltd plans to produce 600 Altlanticas in theupcoming period. Material costs are £120 per guitar. Each guitar uses 4Kg of material. The labour rate is £18.50 per hour and eachguitar takes 3.5 hours to manufacture. Variable overheads are £20 per unit. Fixed overheads attributed to the manufacturing of allAtlanticas are expected to be £60,000 and absorbed on a per unit basis. Each Atlantica will sell for £350.What is the expected margin of safety in units?A) 2,400 unitsB414 unitsC) 172 units186 units

Margin of Safety means the Units that will be sold above the Break even Sales. Break Even Sales…

Answered: Chord Ltd manufactures different types…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 6PA: Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A...

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Garcia Co. sells snowboards. Each snowboard requires direct materials of $100, direct labor of $30, and variable overhead of $45. The company expects fixed overhead costs of $635,000 and fixed selling and administrative costs of $115,000 for the next year. It expects to produce and sell 10,000 snowboards in the next year. What will be the selling price per unit if Garcia uses a markup of 15% of total cost?
Terra Nova, Inc. has the capacity to rewire 300 vehicle wiring harnesses per day. The expected number of vehicles needing to be rewired per day is 225. The company is paid $26 for each wiring harness rewired. The fixed cost of renting the rewiring equipment is $250 per day. The vehicle bays space rents for $150 per day. The cost of materials is $18 per vehicle and labor costs $3 per wiring harness. What is the break-even number of wiring harnesses rewired per day?
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Patty's Mailbox Company produces a standard mailbox with variable manufacturing costs of $18 per unit. The selling price of the standard mailbox is $25 per unit. The fixed manufacturing overhead cost is $67,000. A normal production run includes 100,000 units. Patty's Mailbox Company has discovered an additional process to change the standard mailbox into a deluxe mailbox. Additional costs are estimated at $4 per unit. The deluxe mailbox would sell for $35. Additional fixed manufacturing overhead cost of $23,000 would be incurred if the deluxe mailbox is produced. There would be no change in the number of units produced. Make an analysis to determine if Patty's Mailbox Company should continue to produce and sell the standard mailbox or change the standard mailbox into a deluxe mailbox. Requirements: 1) List ONLY the relevant information to solve the problem; and use a graphic organizer, such as flowcharts and tables, to show how to solve the problem.
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A company manufactures computer games. The games are in demand all year round and in the next financial year the sales manager plans to sell 12,000 games. The trainee's management accountant has provided the following cost information for 1 unit of computer game. The selling price is £10.00, and the variable cost will consist of direct, materials £1.00 per unit, direct labour cost £5.00 per unit. The fixed cost for the year is expected to be £32,000. Required: You have been asked to provide information that will help the managing director consider the effect on profitability changes in the level of sales activity next year Draw up a marginal statement that calculates the contribution per unit Draw up a marginal cost statement on the basis that 12,000 units will be sold and calculate a. b. the net profit or loss Briefly explain what is meant by breakeven points С. d. Calculate the breakeven units in value and explain what it means to the director Calculate the sales activity to reach a…
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