The company, which manufactures a single product coded 'zeron', achieved a sales value of K8.000.000 for the period under consideration. A unit of 'zeron' was being sold at K20. During the period under review, the company operated at 80% capacity. Suggestions are being made to increase the operating capacity. Details of the cost structure are hereby given: Direct material K4 Direct labour K4 Variable production overhead K80,000 Variable selling overhead K160,000 Variable distribution overhead K120,000 Fixed production overhead K320,000 Fixed selling overhead K180,000 Fixed distribution overhead K80,000 Fixed administration overhead K1,440,000 Further , sales agents are paid a commission of 5% on sales value for selling 'zeron'. Required (1) Compute the company's breakeven point in sales value
The company, which manufactures a single product coded 'zeron', achieved a sales value of K8.000.000 for the period under consideration. A unit of 'zeron' was being sold at K20. During the period under review, the company operated at 80% capacity. Suggestions are being made to increase the operating capacity. Details of the cost structure are hereby given: Direct material K4 Direct labour K4 Variable production overhead K80,000 Variable selling overhead K160,000 Variable distribution overhead K120,000 Fixed production overhead K320,000 Fixed selling overhead K180,000 Fixed distribution overhead K80,000 Fixed administration overhead K1,440,000 Further , sales agents are paid a commission of 5% on sales value for selling 'zeron'. Required (1) Compute the company's breakeven point in sales value
Chapter9: Responsibility Accounting And Decentralization
Section: Chapter Questions
Problem 8EA: Using the information in the previous exercises about Marleys Manufacturing, determine the operating...
Related questions
Concept explainers
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.
Topic Video
Question
![The following information applies to a company operating in Chilanga. It is the operational results for the year just ended, 2019.
The company, which manufactures a single product coded 'zeron' , achieved a sales value of K8.000.000 for the period under
consideration. A unit of 'zeron' was being sold at K20. During the period under review, the company operated at 80% capacity.
Suggestions are being made to increase the operating capacity. Details of the cost structure are hereby given:
Direct material K4
Direct labour K4
Variable production overhead K80,000
Variable selling overhead K160,000
Variable distribution overhead K120,000
Fixed production overhead K320,000
Fixed selling overhead K180,000
Fixed distribution overhead K80,000
Fixed administration overhead K1,440,000
Further , sales agents are paid a commission of 5% on sales value for selling 'zeron'.
Required
(1) Compute the company's breakeven point in sales value](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb10f7428-8b05-48a9-b4c1-b9d613b13f23%2Fbe53450a-3250-41f9-b99e-690053756b87%2Fom6o8rd_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The following information applies to a company operating in Chilanga. It is the operational results for the year just ended, 2019.
The company, which manufactures a single product coded 'zeron' , achieved a sales value of K8.000.000 for the period under
consideration. A unit of 'zeron' was being sold at K20. During the period under review, the company operated at 80% capacity.
Suggestions are being made to increase the operating capacity. Details of the cost structure are hereby given:
Direct material K4
Direct labour K4
Variable production overhead K80,000
Variable selling overhead K160,000
Variable distribution overhead K120,000
Fixed production overhead K320,000
Fixed selling overhead K180,000
Fixed distribution overhead K80,000
Fixed administration overhead K1,440,000
Further , sales agents are paid a commission of 5% on sales value for selling 'zeron'.
Required
(1) Compute the company's breakeven point in sales value
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College