Dreams Ltd. has budgeted fixed production overheads of £120, 000 and the expected level of productionis 4,000 units. After the production period, the actual production level was 10, 000 units and the actualfixed production overheads is £180, 000. Considering this information, which of the following statementsis true?O a. The overheads recovery rate equals £20.O b. There is under-absorption of overheads of £300,000 which increases profit.O c. There is over-absorption of overheads of £120,000 which increases profit.O d. None of the answers is true.

Overheads means all type of indirect costs and expenses being incurred for manufacturing purpose.…

Answered: Dreams Ltd. has budgeted fixed…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 5EB: Cadre, Inc., sells a single product with a selling price of $120 and variable costs per unit of $90....

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Management believes it can sell a new product for $7.50. The fixed costs of production are estimated to be $4,500, and the variable costs are $3.90 a unit. a. Complete the following table at the given levels of output and the relationships between quantity and fixed costs, quantity and variable costs, and quantity and total costs. Round your answers to the nearest dollar Enter zero if necessary. Use a minus sign to enter losses, if any Quantity Variable Costs Fixed Costs 0 500 1,000 $ $ $ S 2,500 $ 3,000 S 1,500 2,000 Total Revenue S Quantity $ $ Total Revenue $ $ $ $ $ $ $ $ $ S Fixed Costs $ $ Total Costs b. Determine the break-even level using the above table and use the Exhibit 19.5 to confirm the break even level of output. Round your answers for the break-even level to the nearest whole number. Round your answers for the fixed costs, variable costs, total costs, and profits (losses) to the nearest dollar. Enter zero if necessary Use a minus sign to enter losses, if any Variable…

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