The following information relates to a company, which produces a single product. Direct labour per unit $ 22 Direct materials per unit $ 12 Variable overheads per unit $ 6 Fixed costs $ 400,000 Selling price per unit $ 60 Actual units sold is 25000 units. Determine the break-even quantity and confirm this by calculation. Identify the firm's margin of safety in units for the period. Calculate the profit made during the period?
The following information relates to a company, which produces a single product. Direct labour per unit $ 22 Direct materials per unit $ 12 Variable overheads per unit $ 6 Fixed costs $ 400,000 Selling price per unit $ 60 Actual units sold is 25000 units. Determine the break-even quantity and confirm this by calculation. Identify the firm's margin of safety in units for the period. Calculate the profit made during the period?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The following information relates to a company, which produces a single product.
|
Direct labour per unit |
$ 22 |
|
Direct materials per unit |
$ 12 |
|
Variable |
$ 6 |
|
Fixed costs |
$ 400,000 |
|
Selling price per unit |
$ 60 |
Actual units sold is 25000 units.
- Determine the break-even quantity and confirm this by calculation.
- Identify the firm's margin of safety in units for the period.
- Calculate the profit made during the period?
- How much units the company should sell if the company wants to make a profit of $ 200,000 for the next six months.
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