The Safeer Company manufactures and sells a single product. Price and cost data on product and operations are Selling price per unit Variable cost per unit Rs.25.00 Annual fixed costs Manufacturing overhead Selling and administrative Direct materials Rs.192,000 276,000 Rs.11.00 Direct labor 5.00 Manufacturing overhead Selling expenses Forecasted annual sales volume Rs.3,000,000 2.50 1.30 REQUIRED: 1. Safeer's breakeven point in units. 2. How many units Safeer must sell to earn Rs.156,000 of operating income. 3. Safeer estimates that its direct labor costs will increase by 8% next year. How many units must Safeer sell next year to reach the breakeven point? 4. If Safeer's direct labor cost increase by 8%, what must the selling price per unit of product be to maintain the same contribution margin ratio? 5. Calculate breakeven point in units, If Safeer's direct labor cost increase by 8% and manufacturing fixed cost to Rs.150,000.

The Safeer Company manufactures and sells a single product. Price and cost data on product and operations are Selling price per unit Variable cost per unit Rs.25.00 Annual fixed costs Manufacturing overhead Selling and administrative Direct materials Rs.192,000 276,000 Rs.11.00 Direct labor 5.00 Manufacturing overhead Selling expenses Forecasted annual sales volume Rs.3,000,000 2.50 1.30 REQUIRED: 1. Safeer's breakeven point in units. 2. How many units Safeer must sell to earn Rs.156,000 of operating income. 3. Safeer estimates that its direct labor costs will increase by 8% next year. How many units must Safeer sell next year to reach the breakeven point? 4. If Safeer's direct labor cost increase by 8%, what must the selling price per unit of product be to maintain the same contribution margin ratio? 5. Calculate breakeven point in units, If Safeer's direct labor cost increase by 8% and manufacturing fixed cost to Rs.150,000.

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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1. Providence Corporation produces a single product and has the following cost structure: Number of units produced each year Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expense Fixed costs: Fixed manufacturing overhead Fixed selling and administrative expense lanolevil subivibr The unit product cost under variable costing is: 7,000 mos i h $78 $89 $6 $3 $532,000 $574,000
The following data are for Elm Leaf Apparel: East Sales volume (units): Product XX Product YY Sales price: Product XX Product YY Variable cost per unit: Product XX Product YY 6,300 3,300 $12 $15 $7 $9 West 5,300 7,100 $13 $14 $7 $9 a. Determine the contribution margin for Product YY. $fill in the blank 1 b. Determine the contribution margin for the West Region. $fill in the blank 2
B. Find the cost of a product Different costs are presented below Direct materials $ 5.00 per unit Indirect materials $ 2.00 per unit Direct labor $ 10.00 per hour Indirect labor $ 3.00 per hour Other variable indirect costs $ 6.00 per hour Other fixed indirect costs $ 10.00 per unit Commissions to sellers $ 4.00 per unit Variable administrative costs $ 6.00 per unit Fixed Administrative Costs $ 10.00 per unit 3. If marketing studies show that the maximum price that consumers are willing to pay for this type of product is $ 48.00, determine how much cost you must reduce in order to maintain the desired% profit
STANDARD COSTINGA company produces a product which has a standard variable production cost of $8 per unit made up as follows:$ per unitDirect material $4.60 (2kg X $2.30 per kg)Direct labour $2.10 (0.7 hours X $3.00 per our)Variable overhead $1.30Fixed manufacturing costs are treated as period costs. The following information is availablefor the period just ended.Variable manufacturing cost of sales (at standard cost) $263,520Opening stock of finished goods (at standard cost) $120,800Closing stock of finished goods (at standard cost) $146,080Direct material rice variance $2,571 unfavourableRaw materials used in manufacture (at actual cost) $170,310Direct labour rate variance $4,760 unfavourableDirect labour efficiency variance $3,240 favourableRequired:(a) Determine for the period just ended(i) the number of units produced(ii) the raw material usage variance(iii) the total actual direct labour cost, and(iv) the actual cost per kg of raw material used.
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Additional Information: Şales revenue per unit will be decreased by BD 1.200 fils for sales more than 9,000 units. a. b. Direct material cost is a variables cost and other production overheads are fixed cost. C. Direct labour consists of machine operatives' wages and the total wages behave as a step cost: Output Up to 7,500 units Over 7,501 and up to 11,000 units Over 11,001 and up to 15,000 units Machine running costs are a semi-variable cost. There is a fixed charge of BD 5,000 plus BD 1.200 fils per unit. Total Direct Labour cost BD 4,850 BD 8,563 BD 10,484 d. Required: the budgeted other production overhead under the output of 11300 units is:
A manufacturer reports the following. Compute contribution margin. Sales Variable cost of goods sold Fixed overhead Variable selling and administrative costs Fixed selling and administrative costs Multiple Choice $800,000 $642,000 $762,000 $524,000 $ 1,218,000 418,000 338,000 158,000 118,000
Given the following information, determine the product cost of one unit: Direct Materials = $60; Direct labor = $10; Apply Overhead based on $2 per Direct Labor hour; Direct labor hours is 4 hours per unit. a. $70 per unit b. $80 per unit c. $78 per unit d. $85 per unit Contribution margin is sales less: a. Fixed overhead and fixed selling and administrative expenses b. Variable Cost of goods sold and variable selling & administrative expenses c. Variable selling and administrative expemses and Fixed selling and administrative expenses d. variable cost of goods sold An investment generates an operating income of $100,000, and the average operating assets are $400,000. What is the return on the investment? a. 100% b. 75% c. 25% d. 20%
PROBLEM SOLVING 1. ABC Mfg. Co. buy and sells its lone product on which the following data are given: Sales volume per annum Unit selling price Production cost per unit: Direct materials Direct labor Variable factory overhead Fixed factory overhead (P25,000/20,000 units) Variable operating expense per unit Fixed operating expenses (P10,000/20,000 units) P1.00 0.50 a. Should the order be accepted? Why? 25,000 units P10.00 P3.50 2.50 2.00 1.25 A special order is received for P2,000 units from a remote market at P7.90, FOB destination. Packing and shipping costs are estimated at P1,200. Decision making: (show computation) b. What is the BEP price or sales cut-off price for the special order?
The following variable production costs apply to goods made by Zachary Manufacturing Corporation: Cost per unit $ 9.00 Item Materials Labor Variable overhead 2.50 0.75 Total $12.25 Required Determine the total variable production cost, assuming that Zachary makes 6.000, 16,000, or 26,000 units. Units Produced 6,000 16,000 26,000 Total variable cost
Additional Information: a. Sales revenue per unit will be decreased by BD 1.200 fils for sales more than 9,000 units. b. Direct material cost is a variables cost and other production overheads are fixed cost. Direct labour consists of machine operatives' wages and the total wages behave as a step C. cost: Output Up to 7,500 units Over 7,501 and up to 11,000 units Over 11,001 and up to 15,000 units Machine running costs are a semi-variable cost. There is a fixed charge of BD 5,000 plus BD 1.200 fils per unit. Total Direct Labour cost BD 4,850 BD 8,563 BD 10,484 d. Required: the budgeted machine running costs under the output of 11300 unit are: