company produces a product and sells 25000 units a month at a selling price of £38. Direct material cost is £12 per unit and direct labour cost is £10 per unit of output. The total fixed costs is £288,000. The factory has a maximum production capacity of 40,000 units. Calculate the margin of safety

Funtastic Company has capacity for the production and sales of 30,000 units.  Current production is 15,000 units and fixed costs are $16 per unit.  If production decreases to 10,000 units, fixed costs will:

Brecht Ltd produces a standard product which is sold for £85 each. The business incurred variable costs of £550,000 last year and total costs were £850,000. The business sold 11,000 units during the year and was operating at full capacity. The business intends to expand its output. This will involve building a factory extension, which will increase annual fixed costs by £120,000 per year. 1. Calculate the number of products that need to be sold in order for the business to break even, after the new factory extension has been built. 2. Calculate the profit (loss) that would be generated if the business sold 10,000 units (i) before the factory extension is built. (ii) after the factory extension is built.

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Chord Ltd manufactures different types of guitars. Its best seller is the Atlantica. Chord Ltd plans to produce 600 Altlanticas in the upcoming period. Material costs are £120 per guitar. Each guitar uses 4Kg of material. The labour rate is £18.50 per hour and each guitar takes 3.5 hours to manufacture. Variable overheads are £20 per unit. Fixed overheads attributed to the manufacturing of all Atlanticas are expected to be £60,000 and absorbed on a per unit basis. Each Atlantica will sell for £350. What is the expected margin of safety in units? A) 2,400 units B 414 units C) 172 units 186 units

The Matrix Company has three product lines of belts-A, B, and C-with contribution margins of $7, $5, and $4, respectively. The president foresees sales of 400,000 units in the coming period, consisting of 40,000 units of A, 200,000 units of B, and 160,000 units of C. The company's fixed costs for the period are $1,020,000. What is the total number of units required to breakeven? Answer:

Crane Ranch Inc. has been manufacturing its own finials for its curtain rods. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 56% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $4 and $5, respectively. Normal production is 31,100 curtain rods per year. A supplier offers to make a pair of finials at a price of $13.30 per unit. If Crane Ranch accepts the supplier's offer, all variable manufacturing costs will be eliminated, but the $47,500 of fixed manufacturing overhead currently being charged to the finials will have to be absorbed by other products. (a) Prepare the incremental analysis for the decision to make or buy the finials. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Inco Make Buy Increase (De Direct 2$ 124400 i $ $ materials Direct labor 155500 i Variable overhead 87080…

A small company produces two products, x and y. Product x requires 1 hour of labour and 6 tons of raw materials, whereas each unit of product y requires2 hours of labour and 5 tons of raw material. The number of hours available each week is 40 and the available raw materials each week is 150 tons. If the contribution to profit is £2 per unit of product x and £3 per unit of y, determine the weekly production mix that will maximize profits.

The Assembly Division of Scottish Motors Company has offered to purchase 90,000 batteries from the Electrical Division for £104 per unit. At a normal volume of 250,000 batteries per year, production costs per battery are as follows: Direct materials Direct manufacturing labor Variable factory overhead Fixed factory overhead Total £ 40 20 12 40 £112 The Electrical Division has been selling 250,000 batteries per year to outside buyers at £136 each; capacity is 350,000 batteries per year. The Assembly Division has been buying batteries from outside sources for £130 each. Required: 5a. Should the Electrical Division manager accept the offer? Explain. 5b. From the company's perspective, will the internal sales be of any benefit? Explain.