QUESTION 2REQUIRED:Use the information provided below to answer the following questions:2.1 Calculate the total net profit for the estimated figures.2.2 Calculate the break-even quantity23 Calculate the break-even value2.4 Calculate the break-even value using the marginal income ratio.2.5 Calculate the target sales volume to achieve a profit of R15 000 000.2.6 Calculate the new break-even quantity and value if the selling price is increased by 10%.2.7 Calculate the margin of safety in units at the original budgeted volume and priceINFORMATIONKitty Limited plans to manufacture bar fridges. According to the 2020 budget conducted by management, budgeted salesare expected to be R10 000 000 with 5 000 units being produced. The company's direct material and direct labour costsare expected to be 5000 cents and 3500 cents per unit respectively. Whereas, the fixed factory overheads andfixed administrative expenses are budgeted at R450 000 and R200 000 respectively. Furthermore, management hasdecided that R150 should be paid to sales consultants as an incentive for each unit sold.

Selling price per unit: It is the price at which a product is sold in the market. The selling price…

Kitty Limited plans to manufacture bar fridges. According to the 2020 budget conducted by management, budgeted sales are expected to be R10 000 000 with 5 000 units being produced. The company's direct material and direct labour costs are expected to be 5000 cents and 3500 cents per unit respectively. Whereas, the fixed factory overheads and fixed administrative expenses are budgeted at R450 000 and R200 000 respectively. Furthermore, management has decided that R150 should be paid to sales consultants as an incentive for each unit sold.

Kitty Limited plans to manufacture bar fridges. According to the 2020 budget conducted by management, budgeted sales are expected to be R10 000 000 with 5 000 units being produced. The company's direct material and direct labour costs are expected to be 5000 cents and 3500 cents per unit respectively. Whereas, the fixed factory overheads and fixed administrative expenses are budgeted at R450 000 and R200 000 respectively. Furthermore, management has decided that R150 should be paid to sales consultants as an incentive for each unit sold.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

GHI Company manufactures two products that sell to the same market. Its budget and operating results for 2021 are as follows: Budgeted Actual Unit sales Product A 30,000 35,000 Product B 60,000 65,000 Unit contribution margin Product A P 4.00 P 3.00 Product B PI0.00 P12.00 Unit selling price Product A PI0.00 P12.00 Product B P25.00 P24.00 Industry volume was estimated to be 1,500,000 units at the time the budget was prepared. Actual industry volume for the period was 2,000,000 units. The market size contribution margin variance is Select one: a. P240,000 U O b. P240,000 F c. P160,000 F d. PI60,000 U
Happy Habanero Inc. has decided to purchase new capital equipment costing $540,000 cash in the next fiscal year. They also intend on selling their old equipment for $31,000 cash. Prepare the capital budget for Happy Habanero Inc. for their upcoming year-end (June 30, 2019). Do not enter dollar signs or commas in the input boxes. Use the negative sign for values that must be subtracted. Happy Habanero Inc. Capital Budget for year-ending June 30, 2019 Capital Expenditures $Answer Sale of Capital Assets $Answer Total Capital Expenditures $Answer
please help me with this?
Alya Sdn Bhd. manufactures and supplies granite pots and pans with glass lids to a company in Japan. The new manager, Rushdi, wants to monitor the quarterly budgets for the quarter ending 30th September 2021 to ensure the sales targeted can be executed as planned even with the current economic condition. The following information is available: Budgeted sales: POTS 60,000 units @RM100 each PANS 40,000 units @RM125 each Budgeted inventories: Beginning Ending Pots Pans Direct material (Granite) Direct material (Glass) Direct material (Handles) 20,000 8,000 32,000 kg 29,000 kg 6,000 units 25,000 10,000 36,000 kg 32,000 kg 7,000 units Standard variable costs: POTS PANS Direct materials: Granite Glass Handles Total materials 5kg @RM8.00 3kg@RM5.00 1 @RM3.00 RM40.00 15.00 3.00 58.00 4kg @RM8.00 3kg@RM5.00 RM32.00 15.00 47.00 Direct labour Variable manufacturing overhead Total 2hours@RM12.00…
GC Pharma is engaged in the manufacturing of medicine. The company has decided to produce 10000 medicine in the year 2021 for which the company has defined the budget of Rs.1,90,000 at the beginning of the year. Still, at the end of the year, it has noticed the actual cost incurred for the production is Rs.1,95,000. There is an excess expenditure of Rs.5000 over-budgeted expenditure. Kindly suggest – Which responsibility manager has to explain excess expenditure of Rs. 5000 and also Explain the components of Responsibility Accounting.
Coronado Industries had sales in 2021 of $5,521,600 and gross profit of $893,200. Management is considering two alternative budget plans to increase its gross profit in 2022.Plan A would increase the unit selling price from $8.00 to $8.40. Sales volume would decrease by 101,500 units from its 2021 level. Plan B would decrease the unit selling price by $0.50. The marketing department expects that the sales volume would increase by 105,560 units.At the end of 2021, Coronado has 32,480 units of inventory on hand. If Plan A is accepted, the 2022 ending inventory should be 28,420 units. If Plan B is accepted, the ending inventory should be equal to 48,720 units. Each unit produced will cost $1.5 in direct labor, $1.3 in direct materials, and $1.2 in variable overhead. The fixed overhead for 2022 should be $1,538,740.
If OMS continues to sell through the independent sales agents and pays the higher commission rate (20% instead of 15%), compute the estimated sales dollars that would be required to generate the level of profit as projected in the budgeted income statement.
Silverstone is a company that manufactures and sells electrical engines for electrical trucks. For its 2023 budget, Silverstone estimates that unit selling price is $10,000, variable manufacturing cost per engine is $5,000. Fixed costs are $600,000 per month. Sales team incurs a flat salary of $8,000 per month, which is already included in monthly fixed cost budget. On top of that, the sales commission is 5% of selling price. Required: a. What is the contribution margin per engine? b. What is the breakeven point in units and in revenues each month? (Show your calculation steps). C. At current price level, Silverstone expects to sell 140 units of its engine. If Silverstone lowers the price by 10%, the marketing team predicts that the sales will increase to 170 units. Is it a good decision? Using the result to illustrate why. d. What is the operating leverage level if Silverstone sells 150 units per month at current price?
The company has decided that security light’s (new Product) selling price of product is £750 oer unit, total sales - 1500 units total budgeted sales is: November- 500 units, December 500 units and January 500 units. The company has just concluded a deal to get a bank loan of £19,000 on the 1st November 2022. The interest on this loan will be paid every month. The company will be required to make 12 equal payments to repay the loan starting from the end of December. From their costs estimates, total fixed cost estimated to be £110,200 and it will be shared equally throughout the period. The variable cost is £230 per unit. The fixed costs are for the whole period, so they are not affected by the level of service. However, the variable costs will increase with services output (ie sales output multiplied with variable cost per product). Variable cost will be paid on the basis of 60% in the month of purchase and 40% the following month. Similarly, revenue from the sale of new security light…
1. Yas corporation is budgeting sales of 53,000 units of product Nous for October 2000. The manufacture of one unit of Nous requires 4 kilos of chemical Loire. During October 2021, Yas plans to reduce the inventory of Loire by 50,000 kilos and increase the finished goods inventory of Nous by 5,000 units. There is no Nous work in process inventory.How many kilos of Loire is Yas budgeting to purchase in October 2021?
Janniel Inc. is preparing its budget for 2016. Income statement for 2015 is presented below: Sales (100,000 units) P1,000,00 Cost of sales 600,000 Gross Profit P400,000 Operating expenses 240,000 Operating Income P160,000 Operating expenses includes depreciation of P40,000. For the year 2016, the company plans to increase selling price by 10% which is expected to decrease sales volume in units by 5%. The cost of sales as a percent of sales will increase to 62%. Other than depreciation, all operating costs are variable. Required: What is the budgeted income for 2016?
Botani Ltd. is budgeting to use 6,000 units of material during the year. Production will be distributed evenly throughout the year. The company does not carry any safety (buffer) levels of inventory. The following additional information is available: Cost of material RM60 per unit Ordering costs RM500 per order Inventory holding costs 8% of the average inventory value per annum Order sizes available 500, 1000, 1500, 2000 and 3000 units Required: Complete the table to show the total annual ordering and inventory holding costs of material for each order size. Identify the optimum order size that would minimise total cost. The supplier is now proposing to supply the material only in quantities of 1,000; 2,000 or 3,000 units; and is willing to offer the following quantity discounts: Order size 1,000 2,000 3,000 Quantity 2.5% 3%…