Problem 4 A factory produces three products A, B and C of equal value from the same manufacturing process. Their joint cost before split off point is 19600 rupees. Subsequent costs are given as under: Particulars A в Material 1500 1300 1000 Labor 200 150 100 Overheads 800 550 400 2500 2000 1500 Selling Price 30000 24000 20000 Estimated Profit on Selling Price 30% 25% 20%

Problem 4 A factory produces three products A, B and C of equal value from the same manufacturing process. Their joint cost before split off point is 19600 rupees. Subsequent costs are given as under: Particulars A в Material 1500 1300 1000 Labor 200 150 100 Overheads 800 550 400 2500 2000 1500 Selling Price 30000 24000 20000 Estimated Profit on Selling Price 30% 25% 20%

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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How many units of A should be produced to maximize the profit of company?
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Exercises 4 Event Company produces a single product with the following characteristics: price per unit, $30.00; variable material cost per unit, $9.20; variable labor cost per unit, $4.40; variable overhead cost per unit, $2.20; and fixed overhead cost per unit, $3.00. Event Company's manufacturing fixed costs are $5 million, and selling, general, and administration fixed costs are $1.5 million. What dollar sales are required for Event Company to earn a target profit of $600,000? Exercises 5 The following information pertains to Torasic Company's budgeted income statement for the month of June: Sales (1,500 units at $300) $450,000 Variable cost 200,000 250,000 280,000 $(30,000) Contribution margin Fixed cost Net loss Required a) Determine the company's breakeven point in both units and dollars. b) The sales manager believes that a $25,000 increase in the monthly advertising expenses will result in a considerable increase in sales. How much of an increase in sales must result from…
Cost Volume Profit Total Company produces one type of machine with the following costs and revenues for the year: Total revenues $4,200,000 Total fixed costs $1,400,000 Total variable costs $2,800,000 Total units produced and sold 700,000 a calculate the breakeven in unit b calculate the quantity that would produce an operating profit of $100000 c calculate the quantity that would produce an operating profit of 10 percent of sales dollars d calculate the breakeven quantity if sales increased by 20 perc ent e calculate the operating margin if 50000 unit are sold
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Problem 5 Ilang Ilang company manufactures Products A and B from a joint process which also yields a by-product. Ilang ilang accounts for the revenue from its by-product sales as a deduction from the cost of goods sold of its main products. Additional information follows: A B C Total Units produced 15,000 9,000 6,000 30,000 Joint Costs ? ? ? 264,000 Sales Value at Split off 290,000 150,000 10,000 450,000 Joint products are allocated using the relative sales value at split off approach What was the joint cost allocated to Product B?
Question 2 Pisang Berhad produces 500,000 switches per year with the following costs: (For the production of 500,000 switches) RM Direct materials 1,000,000 Direct labour 750,000 Variable manufacturing expenses 300,000 450,000 Fixed manufacturing expenses Total cost 2,500,000 RM5/unit Cost/per unit RM2,500,000/500,000 units + A supplier has approached the company, and offered the switches at RM4 per unit. Should the company decided to purchase from the supplier, the company need to employ an incoming quality controller with a salary of RM70,000 per annum. Other than this, all the other fixed manufacturing expenses will remain unchanged. Required: a) Should Pisang Berhad continue with the production of switches internally, or to purchase the switches from the external supplier? Support your answer with appropriate calculations. b) Will your answer change if the facilities freed up by the company can be used to do alternative works that will contribute an annual profit of RM50,000? Why?…