Ziggy Creations makes and sells a single product. Individual product details are as follows: Selling price $ 45 Direct materials $20 Direct labour $10 Fixed Costs $480 000 Estimated sales 36 000 units Production capacity 40 000 units a) Calculate the contribution margin per unit. b) Calculate the breakeven point in units. c) Calculate the expected profit from the estimated sales. d) If Ziggy’s required a profit of $90 000, what level of sales dollars would be required? e) Variable costs are to increase by $5 per unit. If Ziggy’s wants to maintain a profit of $90,000, what will be the required sales volume? Can Ziggy’s achieve this new estimated sales volume?
Ziggy Creations makes and sells a single product. Individual product details are as follows:
Selling price $ 45
Direct materials $20
Direct labour $10
Fixed Costs $480 000
Estimated sales 36 000 units
Production capacity 40 000 units
a) Calculate the contribution margin per unit.
b) Calculate the breakeven point in units.
c) Calculate the expected profit from the estimated sales.
d) If Ziggy’s required a profit of $90 000, what level of sales dollars would be required?
e) Variable costs are to increase by $5 per unit. If Ziggy’s wants to maintain a profit of $90,000, what will be the required sales volume? Can Ziggy’s achieve this new estimated sales volume?
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