If selling price $40 per unit Variable cost $25 per unit Fixed cost $45000 Required: a) What is the breakeven point per unit ? b)What is the activity level to generate a profit of $40000 c)If the company budgets to sell 5000 units of a product. Calculate the margin of safety. d) Calculate the contribution/Sales Ratio of the product. e)Find the breakeven point in sales revenue. f) Calculate
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
If selling price $40 per unit
Variable cost $25 per unit
Fixed cost $45000
Required:
a) What is the breakeven point per unit ?
b)What is the activity level to generate a profit of $40000
c)If the company budgets to sell 5000 units of a product. Calculate the margin of safety.
d) Calculate the contribution/Sales Ratio of the product.
e)Find the breakeven point in sales revenue.
f) Calculate the sales revenue that is required to generate a profit of $40000.
NB: Please to answer question a-f seperately
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