Currumbin Ltd sells a product for which they have a target profit of $30000. This product has variable costs of $4 per unit and total fixed costs of $45000.   If 15000 units are to be sold, what should be the selling price?   a. $2   b. $5   c. $3   d. $9

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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  1. Currumbin Ltd sells a product for which they have a target profit of $30000. This product has variable costs of $4 per unit and total fixed costs of $45000.  

    If 15000 units are to be sold, what should be the selling price?

      a.

    $2

      b.

    $5

      c.

    $3

      d.

    $9

     

     

  2. Arnold Company Pty Ltd provided these estimates for the three months ending 30 June 2020, its first period of operation. The beginning cash balance is $1,000.

    Cash receipts from sales

    $300 000

    Cash payments for expenses

    130 000

    Payment for the purchase of new motor vehicle

    15 000

    Depreciation of motor vehicle

    15 000

    Repayment of a loan

    100 000

    What is the estimated cash balance at 30 June 2010?

      a.

    $55000 deficit

      b.

    $40000 surplus

      c.

    $56000 surplus

      d.

    $155000 surplus

      e.

    $50000 surplus

     

  3. Park Ltd produces financial calculators. The production capacity is 35,000 calculators, and the company is currently operating at 80% capacity. Variable manufacturing costs are $12 per unit. Fixed manufacturing costs are $420,000. The calculators are normally sold to Computek Ltd at $28 each. Bronson has an offer from Office Equipment Ltd (a foreign wholesaler) to purchase an additional 6,000 calculators at $14 per unit. The delivery costs for this order would be $13,000.

    What is the available capacity of Park Ltd before accepting this order?

      a.

    35 000 units.

      b.

    28 000 units.

      c.

    Cannot be determined with the data provided.

      d.

    6 000 units.

      e.

    7 000 units.

  4. Jaxon Ltd settles their creditors’ accounts as follows: 30% in the month of purchase and 70% in the month following purchase. For the month of April their credit purchases totalled $85 000 and in May were $78 000.

    How much cash did Jaxon Ltd pay to their creditors in the month of May?

      a.

    $59 500

      b.

    $23 400

      c.

    $54 600

      d.

    $82 900

      e.

    $80 100

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