XYZ Ltd. produces two products, with the following data:Product X: Selling price Sh. 300, Variable cost Sh. 180Product Y: Selling price Sh. 450, Variable cost Sh. 250Fixed costs: Sh. 2,000,000. Sales mix: 70% Product X, 30% Product Y.(i) Calculate the break - even point in both units and sales value. (5 marks)(ii) Assess the strategic risks of relying heavily on Product X, given its lower contribution margin. (2 marks)

i) Break-Even Summary:Break-Even Units: 13,889 units (9,722 X, 4,167 Y)Break-Even Sales Value: Sh.…

Answered: XYZ Ltd. produces two products, with…

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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(12.) Multi-product Co. produces these products with the following characteristics: Product Price / unit Unit Variable Cost Sr1 P5 3 2 100,000 150,000 Tp2 P6 Pq4 P7 4 Expected Sales 250,000 Total Fixed costs for the company are P1,240,000. Assuming that the product mix would be the same at the break-even point, compute the break-even point in: (a) Units (total and by product line), and (b) Sales in pesos (total and by product line).
1. Alpha and Beta companies produce the same product with different technology. The selling price (T) is €10 and the production capacities range from 50,000 to 150,000 for each company. The cost elementsfor Alpha are: Fixed costs (CRS)= €12,000 and Average Variable Cost (MMK) = €7, and for Beta business: SK = €25.000 and MME =€5. a) To find the quantity and value of a break-even point for each (b) Calculate the operational leverage ratio (MLM) at 90,000 and 130,000 units for A and B.
Wilderness Products, Incorporated, has designed a self-inflating sleeping pad for use by backpackers and campers. The following information is available about the new product: a. An investment of $1,350,000 will be necessary to carry inventories and accounts receivable and to purchase some new equipment needed in the manufacturing process. The company's required rate of return is 24% on all investments. b. A standard cost card has been prepared for the sleeping pad, as shown below: Direct materials Direct labor Manufacturing overhead (20% variable) Total standard cost per pad Standard Quantity or Hours 4.0 yards 2.4 hours 2.4 hours Standard Price or Rate $2.70 per yard $8.00 per hour $12.50 per hour Standard Cost $10.80 19.20 30.00 $ 60.00 c. The only variable selling and administrative expense will be a sales commission of $9 per pad. The fixed selling and administrative expenses will be $732,000 per year. d. Because the company manufactures many products, no more than 38,400 direct…
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