108,000 units next year. J
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- Jaime Ltd manufactures and sells a small electric product to order for the computer industry. The estimated selling price and variable costs per unit for next year are as follows: (£ per unit) Selling price 654.00 Variable costs: Direct materials 216.00 Direct labour 108.00 Production overhead 54.00 Selling & distribution overhead 27.00 Jaime Ltd expects to sell 108,000 units next year. Jaime Ltd expects the stock level at the start of the year to be NIL and the stock at the end of the year to be 18,000 units. Information on fixed costs is as follows: Fixed costs: £ Production overhead 1,452,000 Selling & distribution 360,000 Administration overhead 342,000 Question: (a) Using absorption costing: (i) Calculate the production cost per unit. (ii) Prepare an income statement for the year.Jaime Ltd manufactures and sells a small electric product to order for the computer industry. The estimated selling price and variable costs per unit for next year are as follows: (£ per unit) Selling price 654.00 Variable costs: Direct materials 216.00 Direct labour 108.00 Production overhead 54.00 Selling & distribution overhead 27.00 Jaime Ltd expects to sell 108,000 units next year. Jaime Ltd expects the stock level at the start of the year to be NIL and the stock at the end of the year to be 18,000 units. Information on fixed costs is as follows: Fixed costs: £ Production overhead 1,452,000 Selling & distribution 360,000 Administration overhead 342,000 Question: (a) Using absorption costing: (i) Calculate the production cost per unit.Suppose that your company sells a product for which the annual demand is 10,000 units. Holding costs are $1.00 per unit per year, and setup costs are $200 per order. What is the minimum total stock administration cost for the product?
- Rose Trading had RM210,000 of net profit in year 2021 when the selling price per unit was RM150, the variable costs per unit were RM90, and the fixed costs were RM570,000. Management expects per unit data and total fixed costs to remain the same in year 2022. The manager of Rose Trading is under pressure from investors to increase net profit by RM52,000 in year 2022.Required:(i) Compute the number of units sold in year 2021.(ii) Compute the number of units that would have to be sold in year 2022 to reach the shareholders’ desired profit level.ABC Corporation sells its product for $12 per unit. Next year, fixed expenses are expected to be $400,000 and variable expenses are expected to be $8 per unit. How many units must the company sell to generate a target profit (net operating income) of $80,000?Rose Trading had RM210,000 of net profit in year 2021 when the selling price per unit was RM150, the variable costs per unit were RM90, and the fixed costs were RM570,000. Management expects per unit data and total fixed costs to remain the same in year 2022. The manager of Rose Trading is under pressure from investors to increase net profit by RM52,000 in year 2022.Required:(iii) Assume that Rose Trading sells the same number of units in year 2022 as it did in year 2021. What would the selling price have to be to reach the shareholders’ desired profit level?(iv) Assuming actual sales in year 2022 are 16,000 units with the new selling price as computed in (c), compute the margin of safety in (i) units and (ii) as a ratio. Briefly explain your findings. (Tips: Interpret about margin of safety)
- Currumbin Ltd sells a product for which they have a target profit of $30000. This product has variable costs of $4 per unit and total fixed costs of $45000. If 15000 units are to be sold, what should be the selling price? a. $2 b. $5 c. $3 d. $9 Arnold Company Pty Ltd provided these estimates for the three months ending 30 June 2020, its first period of operation. The beginning cash balance is $1,000. Cash receipts from sales $300 000 Cash payments for expenses 130 000 Payment for the purchase of new motor vehicle 15 000 Depreciation of motor vehicle 15 000 Repayment of a loan 100 000 What is the estimated cash balance at 30 June 2010? a. $55000 deficit b. $40000 surplus c. $56000 surplus d. $155000 surplus e. $50000 surplus Park Ltd produces financial calculators. The production capacity is 35,000 calculators, and the company is currently operating at 80% capacity. Variable…LMN Ltd sells 2.0m units of its product Y per year at a selling price of R200 per unit. Variable costs are R125 per unit. Fixed costs are R100m per year. What is the degree of operating leverage (DOL) at the current level of sales? DOL = 3.50 b. DOL = 2.00 c. DOL = 1.50 d. DOL = 2.25 e. DOL = 3.00A Company manufactures and sells stationary. Last year, the stationary it sold for £15 each, andthe variable expense was £4.50 per unit. The company needed to sell 20,000 of stationary tobreak even. The operating profit last year was £16,800. The Company anticipations for thecoming year include the following: The selling price per stationary will be £18.00.Variable expenses will increase by one third. Fixedexpenses will increase by 10 per cent.If company wishes to earn £45,000 in operating profit for the coming year, the company's salesvolume in pounds must be: A. £ 427,500 B. £ 515,250 C. £ 414,000 D. £ 459,000
- AZ Humanade, Inc. expects to earn P150,000 next year after taxes on sales of P2,200,000. Stanley manufactures only one product. The firm’s selling price is P8 a piece and with a variable cost of P2.40 a piece. Tax Rate is currently at 34%. REQUIRED: What are the firm’s expected fixed costs for next year? What is the breakeven point in units?ABC Corp has the following data in year 2020: Sales 400,000; Variable cost 300,000 and Net loss 50,000. If the company wants to have a profit ratio of 10% of sales in year 2021, how much is the additional sale needed by ABC Corp to meet the target profit ratio?Zain glassware has made the forecast of sales shown in the following table. Also given is the probability of each level of sales. Sales Probability Rs. 200,000 .20 300,000 .60 400,000 .20 The firm has fixed operating costs of Rs. 75,000 and variable operating costs equal to the 70% level of sales. The company pays Rs. 12,000 in interest per period. The tax rate is 40%. Compute the earnings before interest and taxes (EBIT) for each level of sales. Compute the earnings per share (EPS) for each level of sales, the expected EPS, the standard deviation of the EPS and the coefficient of variation of EPS, assuming that there are 10,000 shares of common stock outstanding. Zain glassware has the opportunity to reduce its leverage to zero and pay no interest. This will require that the number of shares of common stock outstanding be increased to 15,000. Repeat (b) under this assumption. Compare your findings in (b) and (c) and comment on the reduction…