(a)Kimberley-Clark makes luxury hampers for sale in a chain of high-class departmentstores. The following financial information is available in Table Q2. Current outputand sales are set at 30,000 hampers per year, though the fim has the capacity toproduce 50,000 hampers per year.Table 2COST ELEMENTPRICE (RM)1. Wholesale price2. Labor and material costs3. Bought-in components4. Overheads801525800,000(i)Identify and calculate the fixed cost.(11)Identify and calculate the variable cost.(111)Calculate the break-even quantity for the firm.(iv)Calculate the level of profit the firm is making.

1)Fixed Cost are total overheads that are constant and do not change with change in activity level.…

wing financial information is available in Table Q2. Current output at 30,000 hampers per year, though the fim has the capacity to ampers per year. Table 2 COST ELEMENT ale price nd material costs -in components ads PRICE (RM) 80 15 25 800,000 nd calculate the fixed cost.

wing financial information is available in Table Q2. Current output at 30,000 hampers per year, though the fim has the capacity to ampers per year. Table 2 COST ELEMENT ale price nd material costs -in components ads PRICE (RM) 80 15 25 800,000 nd calculate the fixed cost.

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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Question

(a)
Kimberley-Clark makes luxury hampers for sale in a chain of high-class department
stores. The following financial information is available in Table Q2. Current output
and sales are set at 30,000 hampers per year, though the fim has the capacity to
produce 50,000 hampers per year.
Table 2
COST ELEMENT
PRICE (RM)
1. Wholesale price
2. Labor and material costs
3. Bought-in components
4. Overheads
80
15
25
800,000
(i)
Identify and calculate the fixed cost.
(11)
Identify and calculate the variable cost.
(111)
Calculate the break-even quantity for the firm.
(iv)
Calculate the level of profit the firm is making.

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