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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?

FINANCIAL ACCOUNTING
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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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.

 

  1. Determine the break-even quantity and confirm this by calculation.
  2. Identify the firm's margin of safety in units for the period.
  3. Calculate the profit made during the period?            
  4. 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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