Enterprise Ltd are developing a new type of floor cleaner. Market research ndicated that customers would be willing to pay £130 for the product. The company usually expect a profit margin of 30% on products. Fixed costs enhancements to production machinery are expected to be £150,000 per year a Quality assurance £50,000. The company is estimating an annual production volume of 50,000 and alloca overheads on the basis of number of units produced. Materials are expected to cost £56.45 per unit. Each product requires 2 and a hours of specialist labour to manufacture and the average cost of labour is £14.

Enterprise Ltd are developing a new type of floor cleaner. Market research ndicated that customers would be willing to pay £130 for the product. The company usually expect a profit margin of 30% on products. Fixed costs enhancements to production machinery are expected to be £150,000 per year a Quality assurance £50,000. The company is estimating an annual production volume of 50,000 and alloca overheads on the basis of number of units produced. Materials are expected to cost £56.45 per unit. Each product requires 2 and a hours of specialist labour to manufacture and the average cost of labour is £14.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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