Kimberley-Clark makes luxury hampers for sale in a chain of high-class department stores. The following financial information is available in Table Q2. Current output and sales are set at 30,000 hampers per year, though the firm has the capacity to produce 50,000 hampers per year. Table Q2 COST ELEMENT PRICE (RM) 80 1. Wholesale price 2. Labor and material costs 15 3. Bought-in components 4. Overheads 25 800,000 (i) Identify and calculate the fixed cost. (ii) Identify and calculate the variable cost. (iii) Calculate the break-even quantity for the firm. (iv) Calculate the level of profit the firm is making.
Kimberley-Clark makes luxury hampers for sale in a chain of high-class department stores. The following financial information is available in Table Q2. Current output and sales are set at 30,000 hampers per year, though the firm has the capacity to produce 50,000 hampers per year. Table Q2 COST ELEMENT PRICE (RM) 80 1. Wholesale price 2. Labor and material costs 15 3. Bought-in components 4. Overheads 25 800,000 (i) Identify and calculate the fixed cost. (ii) Identify and calculate the variable cost. (iii) Calculate the break-even quantity for the firm. (iv) Calculate the level of profit the firm is making.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter3: Cost Behavior
Section: Chapter Questions
Problem 5CE: Refer to Cornerstone Exercise 3.4 for data on Dohini Manufacturing Companys purchasing cost and...
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![Q2
(a)
Kimberley-Clark makes luxury hampers for sale in a chain of high-class department
stores. The following financial information is available in Table Q2. Current output
and sales are set at 30,000 hampers per year, though the firm has the capacity to
produce 50,000 hampers per year.
Table Q2
COST ELEMENT
PRICE (RM)
1. Wholesale price
80
2. Labor and material costs
15
3. Bought-in components
4. Overheads
25
800,000
(i)
Identify and calculate the fixed cost.
(ii)
Identify and calculate the variable cost.
(ii)
Calculate the break-even quantity for the firm.
(iv)
Calculate the level of profit the firm is making.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe82e4046-c1d3-4160-955c-ab4d6d8e8356%2F3853efb8-bd2d-4e37-8563-c5f080447a98%2F50c8lvd_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Q2
(a)
Kimberley-Clark makes luxury hampers for sale in a chain of high-class department
stores. The following financial information is available in Table Q2. Current output
and sales are set at 30,000 hampers per year, though the firm has the capacity to
produce 50,000 hampers per year.
Table Q2
COST ELEMENT
PRICE (RM)
1. Wholesale price
80
2. Labor and material costs
15
3. Bought-in components
4. Overheads
25
800,000
(i)
Identify and calculate the fixed cost.
(ii)
Identify and calculate the variable cost.
(ii)
Calculate the break-even quantity for the firm.
(iv)
Calculate the level of profit the firm is making.
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