Required:(a) Economic order quantity(b) Optimum number of orders per year() Total cost of economic order quantity(d) Time gap between two consecutive orders.Ans: (a) 500 units (b) 10 times (c) Rs. 50,000 (d) 1.2 month or 3The annual need of a manufacturing company is 12,000 units and other information arbelow:Annual return on investment..15%Rent, tax and insurance per unit.Rs. 2.25 per yearCost of placing an order.Rs. 100Required:(a) Economic order quantity(b) Number of order(c) Length of inventory cycleHints: Purchase price per unit is assumed to be Rupee 1 if it is not

The profitability of the company can be arrived from the income statement prepared by the management…

Aris! are The annual need of a manufacturing company is 12,000 units and other information below: 15% Annual return on investment... Rs. 2.25 per year Rent, tax and insurance per unit.. Rs. 100 Cost of placing an order. Required: (a) Economic order quantity (b) Number of order (c) Length of inventory cycle

Aris! are The annual need of a manufacturing company is 12,000 units and other information below: 15% Annual return on investment... Rs. 2.25 per year Rent, tax and insurance per unit.. Rs. 100 Cost of placing an order. Required: (a) Economic order quantity (b) Number of order (c) Length of inventory cycle

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 36P: Faldo Company produces a single product. The projected income statement for the coming year, based...

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Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
If a company has fixed costs of $6.000 per month and their product that sells for $200 has a contribution margin ratio of 30%, how many units must they sell in order to break even? A. 100 B. 180 C. 200 D. 2,000
Suppose a company finds that shipping cost is 3,560 each month plus 6.70 per package shipped. What is the cost formula for monthly shipping cost? Identify the independent variable, the dependent variable, the fixed cost per month, and the variable rate.
The expected costs for the Maintenance Department of Stazler, Inc., for the coming year include: Fixed costs (salaries, tools): 64,900 per year Variable costs (supplies): 1.35 per maintenance hour Estimated usage by: Actual usage by: Required: 1. Calculate a single charging rate for the Maintenance Department. 2. Use this rate to assign the costs of the Maintenance Department to the user departments based on actual usage. Calculate the total amount charged for maintenance for the year. 3. What if the Assembly Department used 4,000 maintenance hours in the year? How much would have been charged out to the three departments?
Beckham Company has the following information available: Selling price per unit: Variable cost per unit: Fixed costs per year: £400,000 Expected sales per year: 20,000 units What is the expected operating income (i.e. profit) for a year? Select one: O A. £500,000 O B. O C. £700,000 £680,000 £100 £55 O D. £480,000
Julekha conversion period of 50 days, an average cullecuion period (DSO) uf 35 lays, and a payables deferral period of 25 days. Assume that cost of goods sold is 80% of Enterprises has an inventory sales. Julekha's annual cost of labour is Tk.550,00N) and annual cost of materials is Tk.750,000. ASsume a year = 360 days. a. What is the length of the firm's cash conversion cycle? b. II annual Sales Negus' Tk.4,380,(00) and all sales are on credit, what is the fim's investment in dCCDunts recrivahle? c. How many times per year does Negus Enterprises turn over its inventory? d. How much working capital linancing does Negus have to ensure to complete the cash convPision cycle are
Suppose that a company expects the fo llowing financial resuJts from a project during its first year ope ration:• Sales revenue: $250.000• Variable costs: $80.000• Fixed costs: $50.000• Total unit produced and so ld: 1,000 units(a) Compute the contribution ma rgin pe rcentage.(b) Compute the brcakcven point in units sold.
21) The initial cost for a factory is $ 6M. The major product of the factory has revenue of $100 per unit and $55 per unit as a variable cost. Based on the given, find the following: (a) QBE per year. (b) the annual profit if the expected sales between 100,000 and 200,000.
ABC Company manufactures the product XE-17. The product is sold at a unit price of $70.Variable expenses are $13.50 per unit and fixed expenses are $220,000 per year.Required :a. What should be the product’s CM ratio? b. Calculate the BEP is sales dollars and in units for ABC Company. c. The manager of ABC company estimates that in the coming year, the company’s sales willincrease by $80,000 (from the current sales). How much should the net profit / loss increase/decrease if the fixed costs remain constant? d. The manager of ABC company predicts that by spending an additional $80,000 per year onadvertising and using higher quality raw material (which will in turn increase the raw materialcost per unit by $3), and increasing selling price per unit by 2% (to compensate for theincreased costs), unit sales will increase by two- thirds of the current sales units. Should thecompany go with the manager’s proposed plan? Explain your answer. (Assume that in thecurrent year, the company sold…
ABC Company manufactures the product XE-17. The product is sold at a unit price of $70.Variable expenses are $13.50 per unit and fixed expenses are $220,000 per year.Required :a. What should be the product’s CM ratio? b. Calculate the BEP is sales dollars and in units for ABC Company. c. The manager of ABC company estimates that in the coming year, the company’s sales willincrease by $80,000 (from the current sales). How much should the net profit / loss increase/decrease if the fixed costs remain constant? d. The manager of ABC company predicts that by spending an additional $80,000 per year onadvertising and using higher quality raw material (which will in turn increase the raw materialcost per unit by $3), and increasing selling price per unit by 2% (to compensate for theincreased costs), unit sales will increase by two- thirds of the current sales units. Should thecompany go with the manager’s proposed plan? Explain your answer. (Assume that in thecurrent year, the company sold…
1. The more reliable sales amount from which to base projected sales is b) Latest year a) Latest month c) Latest 2 years d) Latest 5 years 2. Assume: Each factory worker can make 10 units of product per hour. Each worker's wage is P6 per hour. The total labor cost to finish 20,000 units of product is a) P6,000 b) P12,000 c) P120,000 d) P1,200,000 3. The following are steps in the financial planning process. Choose the correct order. A. Analysis and evaluation of projected financial statements B. Setting forecasts on sales, cost, expenses and capital expenditures C. Review and evaluation of projected financial plan D. Preparation of projected financial statements с) В-А-С-D a) C-A-D-B b) В-D-A-C d) A-C-B-D 4. Assume the following projections or forecasts: Retained earnings will increase by P75; current assets will increase by P200; current liabilities will spontaneously increase by P105. Funds need to increaseby a) P380 b) P240 c) P170 d) P20
The management of Lambda Corporation has received the Notifications following forecast for the next year. Sales revenue $600 000 Fixed cost Vanable cost $275 000 270 000 Total cost Net income 545 000 $55 000 Capacity is a sales volume of $800 000. CASE STUDY 217 (a) Compute (1) the contribution margin: (1) the contribution rate. (b) Compute the break-even point (i) in dollars. (1) as a percent of capacity. (c) Determine the break-even volume in dollars it fixed cost is increased by 540 000, while variable cost is helo to 40% of