Question 2 – A multi-product company The following table depicts the budgeted sales volume and unit costs and profits for an English manufacturer (Toys Ltd.) of two different children's toys, both of which are produced in the same factory: per Product A B Budgeted sales (units) 2500 3000 Sales price per unit Material 40 39 12 Labour 12 20 Variable overheads 5 4 Fixed overhead per unit 6 10 35 Total cost per unit Profit per unit 40 -1 (a) Calculate the contribution per unit and total contribution for each of the two products. Since product B is unprofitable, calculate its break-even output i.e. sales quantity. production? Explain and justify your answer. Should management discontinue its contribution per unit A: 40-12-12-5 = 11 B: 39-6-20-4 = 9 total contribution A: 11*2500 = 27 500 B: 9*3000 = 27 000 break-even output (B) FC=10*3 000 = 30 000 BEP= 30 000/9 = 3 333,33 units The BEP is below the budgeted sales volume, but they should still keep producing, because they have prositive contribution. The contribution is at 9 and the FC is at 10 so they almost cover all fixed cost. If they stop producing they would face even higher losses.

Question 2 – A multi-product company The following table depicts the budgeted sales volume and unit costs and profits for an English manufacturer (Toys Ltd.) of two different children's toys, both of which are produced in the same factory: per Product A B Budgeted sales (units) 2500 3000 Sales price per unit Material 40 39 12 Labour 12 20 Variable overheads 5 4 Fixed overhead per unit 6 10 35 Total cost per unit Profit per unit 40 -1 (a) Calculate the contribution per unit and total contribution for each of the two products. Since product B is unprofitable, calculate its break-even output i.e. sales quantity. production? Explain and justify your answer. Should management discontinue its contribution per unit A: 40-12-12-5 = 11 B: 39-6-20-4 = 9 total contribution A: 112500 = 27 500 B: 93000 = 27 000 break-even output (B) FC=10*3 000 = 30 000 BEP= 30 000/9 = 3 333,33 units The BEP is below the budgeted sales volume, but they should still keep producing, because they have prositive contribution. The contribution is at 9 and the FC is at 10 so they almost cover all fixed cost. If they stop producing they would face even higher losses.

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

Fast pls solve this question correctly in 5 min pls I will give u like for sure Savitr Prudencia has to make two payments of 2,000 each, within 6 and 9 months, to deal with some extraordinary repairs from the community of neighbors. Calculate how much money Doña Prudencia must place today in an account that offers 6% annual interest, to meet these payments.
Help please
solve using the appropriate formulas show full workings and find the answer. DONT USE EXCEL TO SOLVE ANYTHING ONLY USE RELEVANT FORMULAS TO SOLVE AND SHOW ALL WORKINGS 5. You have $33,556.25 in a brokerage account, and you plan to deposit an additional $5,000 at the end of every future year until your account totals $220,000. You expect to earn 12% annually on the account. How many years will it take to reach your goal?
a and b please
this is really a basic question please provide neat and clean answer well detailed answer ill upvote
8 Suppose a health care organization buys supplies from a vendor but has not yet paid for the supplies. The vendor will give a 5% discount to the health care organization if it pays the invoice within 20 days as an incentive to pay quickly. What is the liability that the health care organization should record on its balance sheet: the full cost of the invoice or the discounted amount?
You have decided to take a passive approach to fitness and order the 'Ab-Cruncher' from the shopping network. The Ab-Cruncher can be purchased for four easy monthly payments of $19.95 starting in one month. If interest is charged at 112 = 12%, find the cost of financing.
Please provide neat and clean handwriting and clear image
Quickly quickly quickly i need help in 15 minutes please please please please please
Qd 41.
For he 3 part question that follows, provide your answer to each part. Identify each part with coordinating response. Part A: What is the approxiamate APR formula? Part B: Keely buys a car for 18,000 with down payment of 1000. Estimate her APR to the nearest tenth of a percent if her monthly payments are 375 per onth for 60 months. OPart C: show your work to support your answer for Part B