Am Berhad is a company producing tables. After discussing with the marketing manager, the production manager planning to focus on producing a product named AFI. The marketing manager is observing on two states, Selangor and Pahang, the sales at both states is expected to be RM500,000 an RM810,000 respectively. Information related to the cost per unit of the production for both states are as follows: SELANGOR (RM) PAHANG (RM) Selling price Direct material 100 135 40 45 Direct labour 10 15 Overhead 20 30 50% of the overhead in SELANGOR and PAHANG are fixed. 2.Calculate the followings and show all your workings. i. The break-even point (in unit and sales value) for both states. i. The margin of safety (in unit) for both states. ii. Advice to the management in which state should the company sell AFI.

Am Berhad is a company producing tables. After discussing with the marketing manager, the production manager planning to focus on producing a product named AFI. The marketing manager is observing on two states, Selangor and Pahang, the sales at both states is expected to be RM500,000 an RM810,000 respectively. Information related to the cost per unit of the production for both states are as follows: SELANGOR (RM) PAHANG (RM) Selling price Direct material 100 135 40 45 Direct labour 10 15 Overhead 20 30 50% of the overhead in SELANGOR and PAHANG are fixed. 2.Calculate the followings and show all your workings. i. The break-even point (in unit and sales value) for both states. i. The margin of safety (in unit) for both states. ii. Advice to the management in which state should the company sell AFI.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 16E

See similar textbooks

Related questions

Q: Assess the cost of sales part. Provide negative and positive observation.

A: The solution is per your requirement. Cost of sales is the costs which are directly related to…

Q: An organisation manufactures a single product. The following information with regard to the raw…

A: The lead time demand is overall demand from here before the expected delivery period after the next…

Q: Sweet Sugar is a manufacturer which producing candy in various flavour. The sales price for each…

A: Contribution: The amount of profits that remain after all direct expenditures have been deducted…

Q: Albany has recently spent some time on researching and developing a new product for which they are…

A: Fixed overhead is the cost that does not change with the change in the volume of the production and…

Q: Azure Ltd produces confectionery and is considering extending their product range to include…

A: Make or Buying decision: If you create or buy a product, you decide whether to manufacture it…

Q: A Swiss Interior Company produces and sells lamps that are sold usually all year round. The company…

A: Normal capacity includes the number of units a company is able to manufacture or sell under normal…

Q: (b) Al Khoud Company is producing Motorcycle parts and is currently in the process of evaluating a…

A: Calculation of Life Cycle Revenue for Full Production Period Number of Motorcycle Parts…

Q: Anobateh enterprise is trying to figure out what materials they are going to make or buy to their…

A: While making make and buy decisions, a company compares the two costs i.e., the buying cost and the…

Q: Sohan Ltd. manufactures three components A, B, and C, the cost of which is as follows: You are to…

A: Meaning of Manufacturing Costs Manufacturing costs are the total costs incurred for the manufacture…

Q: Am Berhad is a company producing tables. After discussing with the marketing manager, the production…

A: Calculation of number of units sold: Number of units = Expected sales / selling price.

Q: Amirul Sdn Bhd, a pen manufacturer, identified that per pen its labour cost was RM5 and its…

A: A flexible budget is one based on different volumes of sales.it flexes the static budget for each…

Q: Am Berhad is a company producing tables. After discussing with the marketing manager, the production…

A: No. of units sold = Total sales / Selling price per unit Selangor = 500,000 / 100 = 5,000 units…

Q: You are advising the management at company ABC regarding their pricing decisions in relation to a…

Q: A company produces three types of products A, B, and C, and is considering its production plan for…

A: Question is based on the concept of Cost accounting

Q: 2) The following information is given for the production and sales of COCIDOS, a new kitchen…

A: Hi student Since there are multiple subparts, we will answer only first three subparts. Breakeven…

Q: PARE Company monitored the efficiency of processes from receiving customer orders until they are…

A: Value added time is the time spent on processes which add value to the product . Value added…

Q: Use the information given below to calculate each of the following independently 3.5 Selling price…

A: Variable costs are those costs which changes with change in activity level. Fixed costs do not…

Q: Anagram Ltd is in the manufacturing business; the organisation maintains a variable cost accounting…

A: Fixed cost are nature of cost which is Fixed irrespective of Production. Whereas variable cost…

Q: Question 1: Pretexpo is a Turkish manufacturing company and produces fabrics for the 2021 Textiles…

A: Optimal order quantity is also known as economic order quantity (EOQ). It is the amount of units of…

Q: a. Determine the amount of desired profit from the production and sale of 800 hane b. Determine the…

A: Product cost method of product pricing refers to pricing of product by considering its total product…

Q: Truly Sambalicious Factory is the sole manufacturer and supplier of three types of traditional…

A: The answer is stated below:

Q: Prepare an absorption-casting income statement, with one column showing the results if 180,000 units…

A: Income Statement:Income statement is a part of financial statement, shows the income and expenditure…

Q: (a) Rayya Sdn. Bhd. produces two types of cakes: butter cake and chocolate cake. Of the two,…

A: Income statement is the statement deals in income and expenses of the company. it is also known as…

Q: Coast to Coast Surfboards Inc. manufactures and sells two styles of surfboards, Atlantic Wave and…

A: Contribution Margin :— It is the difference between sales revenue and total variable cost.…

Q: The accounting firm of JN Corporation has been studying the sales requirements of the Shayan…

A: Contribution margin is calculated as excess of sales revenue over all variable expenses.

Q: ZC Phone Manufacturing is a company that manufactures and sells ZC mobile phone. The company has…

Q: PARE Company

A: In this question there are multiple question, we solved only 1 parts as per guidelines,for further…

Q: Merlot Manufacturing Ltd makes three different products, the details of which are as follows:…

A: When there is some constraint in production like labour hours or machine hours is limited, then…

Q: wing financial information is available in Table Q2. Current output at 30,000 hampers per year,…

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

Q: compute for throughput time

A: Throughput time or the period is the time in days or in hours which are required by the company in…

Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

Question

Am Berhad is a company producing tables. After discussing with the marketing manager, the
production manager planning to focus on producing a product named AFI. The marketing
manager is observing on two states, Selangor and Pahang, the sales at both states is
expected to be RM500,000 an RM810,000 respectively. Information related to the cost per
unit of the production for both states are as follows:
SELANGOR (RM)
PAHANG (RM)
Selling price
Direct material
100
135
40
45
Direct labour
10
15
Overhead
20
30
50% of the overhead in SELANGOR and PAHANG are fixed.
2.Calculate the followings and show all your workings.
i.
The break-even point (in unit and sales value) for both states.
i.
The margin of safety (in unit) for both states.
ii.
Advice to the management in which state should the company sell AFI.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Follow-up Questions

Read through expert solutions to related follow-up questions below.

Follow-up Question

Marketing manager suggests the company should sell CHANTEQ in both states as he is confident the market would be good. However, the direct material cost will increase by 10%.

Advise the management on how many units to be sold for both states to maintain its annual profit.

Solution

by Bartleby Expert

SEE SOLUTION

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Spectrum Corp. makes two products: C and D. The following data have been summarized: (Click the icon to view the data.) Spectrum Corp. desires a 27% target gross profit after covering all product costs. Considering the total product costs assigned to the Products C and D, what would Spectrum have to charge the customer to achieve that gross profit? Round to two decimal places. Begin by selecting the formula to compute the amount that the company should charge for each product. Total product cost per unit Spectrum should charge 2091.10 for Product C. Data table Direct materials cost per unit Direct labor cost per unit Indirect manufacturing cost per unit Total costs assigned Print Product cost as a percentage of sales price Product C $ 900.00 $ 400.00 226.50 $ 1,526.50 $ Done Product D 2,400.00 100.00 531.00 3,031.00 X = Required sales price per unit G
Spectrum Corp. makes two products: C and D. The following data have been summarized: (Click the icon to view the data.) Spectrum Corp. desires a 25% target gross profit after covering all product costs. Considering the total product costs assigned to the Products C and D, what would Spectrum have to charge the customer to achieve that gross profit? Round to two decimal places. Begin by selecting the formula to compute the amount that the company should charge for each product. Required sales price per unit Data table Direct materials cost per unit Direct labor cost per unit Indirect manufacturing cost per unit Total costs assigned Print $ $ Product C 600.00 $ 300.00 270.00 1,170.00 S Done - X Product D 2,400.00 200.00 604.00 3,204.00
Required: 1) Develop a segmented income statement for Rayya Sdn. Bhd. for the coming year using variable costing.
Jamison Company uses the total cost method of applying the cost-plus approach to product pricing. Jamison produces and sells Product X at a total cost of $1,200 per unit, of which $820 is product cost and $380 is selling and administrative expenses. In addition, the total cost of $1,200 is made up of $680 variable cost and $520 fixed cost. The desired profit is $180 per unit. Determine the markup percentage on total cost.fill in the blank 1 %
Jamison Company uses the total cost method of applying the cost-plus approach to product pricing. Jamison produces and sells Product X at a total cost of $1,500 per unit, of which $1020 is product cost and $480 is selling and administrative expenses. In addition, the total cost of $1,500 is made up of $850 variable cost and $650 fixed cost. The desired profit is $210 per unit. Determine the markup percentage on total cost. %
Milden Company has an exclusive franchise to purchase a product from the manufacturer and distribute it on the retail level. As an aid in planning, the company has decided to start using a contribution format income statement. To have data to prepare such a statement, the company has analyzed its expenses and has developed the following cost formulas: Cost Cost Formula Cost of good sold $30 per unit sold Advertising expense $186,000 per quarter Sales commissions 8% of sales Shipping expense ? Administrative salaries $96,000 per quarter Insurance expense $10,600 per quarter Depreciation expense $66,000 per quarter Management has concluded that shipping expense is a mixed cost, containing both variable and fixed cost elements. Units sold and the related shipping expense over the last eight quarters follow: Quarter Units Sold ShippingExpense Year 1: First 32,000 $ 176,000…
Hi, can someone help me with this please?
A company produces 4 different products. Table 1 shows the selling price, production cost, and selling probability associated with each product. Product Selling Price Production Cost Selling Probability A $350 $300 0.24 B $290 $250 0.17 C $275 $220 0.23 D $175 $150 0.36 Calculate the expected value and standard deviation of the company’s revenue related to selling these products. Calculate the expected value and standard deviation of the company’s cost related to selling these products. What would be the expected profit and its standard deviation? Explain every assumption you made.
Mallory Company uses the product cost method of applying the cost-plus approach to product pricing. It produces and sells Product X at a total cost of $35 per unit, of which $28 is product cost and $7 is selling and administrative expenses. In addition, the total cost of $35 is made up of $24 variable cost and $11 fixed cost. The desired profit is $8 per unit. Determine the markup percentage on product cost. Round your answer to one decimal place. %
Total cost method of product pricing Based on the data presented in Exercise 17, assume that Smart Stream Inc. uses the total cost method of applying the cost-plus approach to product pricing. A. Determine the total costs and the total cost amount per unit for the production and sale of 10,000 cellular phones. B. Determine the total cost markup percentage (rounded to two decimal places) for cellular phones. C. Determine the selling price of cellular phones. (Round markup to the nearest dollar.)
Subject - account Please help me. Thankyou.
Abdulwahab Corporation is estimating the cost function for total cost of production of product A using the high-low method. The data collected for the past year is as following: Number of units Total Quarter produced Costs 1 4,000 $ 1,000 2 5,400 1,280 3 7,000 1,600 4 9,000 2,000 Calculate the following amounts: The variable cost per unit The fixed cost Explain the method used by the company to estimate the cost function. Suggest other methods than may be used to estimate cost function.