Question
In: Accounting
Seema stationers manufacture plastic files for office use. Thebreak up of its cost and sales...
Seema stationers manufacture plastic files for office use. The break up of its cost and sales is as follows :
-Variable Cost Rs. 60 per file
• Fixed Cost Rs. 80,000 per annum
• Production Capacity : 4,000 files per annum
• Selling Price : Rs. 100 per file
Compute the following :
(a) Break even point.
(b) Number of files to be sold to earn a net profit of Rs. 20,000.
(c) If the firm manufactures and sells 500 files more per year with an additional fixed cost of Rs. 4,000, what should be the selling price to earn the same amount of profit as in (b) above ?
Solutions
Expert Solution
| ans a) | Breakeven point = (Fixed cost)/(sales price per unit - variable cost per unit) | |||||||
| 80,000/(100-60) | ||||||||
| 2000 | ||||||||
| Ans = | 2000 | units | ||||||
| ans b) | Number of files to be sold= | |||||||
| (Fixed cost + required profit)/(sales price per unit - variable cost per unit) | ||||||||
| (80000+20000)/(100-60) | ||||||||
| 2500 | ||||||||
| Ans = | 2500 | units | ||||||
| ans c) | selling price to earn the same amount of profit | |||||||
| Variable cost = | 270000 | |||||||
| (4000+500)*60 | ||||||||
| fixed cost = | 84000 | |||||||
| required profit = | 20000 | |||||||
| i | total | 374000 | ||||||
| ii | Number of unit = | 4500 | ||||||
| iii=i/ii | Price per unit = | $ 83.11 | ||||||
| Ans = | $ 83.11 | |||||||
ekkarill92 answered 2 years agoRelated Solutions
Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information...
Parker Plastic, Inc., manufactures plastic mats to use with
rolling office chairs. Its standard cost information for last year
follows:
Standard Quantity
Standard Price (Rate)
Standard Unit Cost
Direct materials (plastic)
12
sq ft.
$
1.10
per sq. ft.
$
13.20
Direct labor
0.25
hr.
$
13.20
per hr.
3.30
Variable manufacturing overhead (based on direct labor
hours)
0.25
hr.
$
2.20
per hr.
0.55
Fixed manufacturing overhead ($579,080 ÷ 934,000 units)
0.62
Parker Plastic had the following actual results...
Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information...
Parker Plastic, Inc., manufactures plastic mats to use with rolling
office chairs. Its standard cost information for last year
follows:
Standard Quantity
Standard Price (Rate)
Standard Unit Cost
Direct materials (plastic)
10
sq ft.
$
0.82
per sq. ft.
$
8.20
Direct
labor
0.25
hr.
$
10.20
per hr.
2.55
Variable manufacturing overhead (based on direct labor hours)
0.25
hr.
$
1.40
per hr.
0.35
Fixed
manufacturing overhead $270,600 ÷ 902,000 units)
0.30
Parker Plastic had the following actual results...
Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information...
Parker Plastic, Inc., manufactures plastic mats to use with
rolling office chairs. Its standard cost information for last year
follows: Standard Quantity Standard Price (Rate) Standard Unit Cost
Direct materials (plastic) 9 sq ft. $ 1.30 per sq. ft. $ 11.70
Direct labor 0.3 hr. $ 13.50 per hr. 4.05 Variable manufacturing
overhead (based on direct labor hours) 0.3 hr. $ 1.30 per hr. 0.39
Fixed manufacturing overhead ($619,080 ÷ 938,000 units) 0.66 Parker
Plastic had the following actual results...
Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information...
Parker Plastic, Inc., manufactures plastic mats to use with
rolling office chairs. Its standard cost information for last year
follows: Standard Quantity Standard Price (Rate) Standard Unit Cost
Direct materials (plastic) 8 sq ft. $ 1.02 per sq. ft. $ 8.16
Direct labor 0.3 hr. $ 11.10 per hr. 3.33 Variable manufacturing
overhead (based on direct labor hours) 0.3 hr. $ 2.60 per hr. 0.78
Fixed manufacturing overhead ($383,880 ÷ 914,000 units) 0.42 Parker
Plastic had the following actual results...
Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information...
Parker Plastic, Inc., manufactures plastic mats to use with
rolling office chairs. Its standard cost information for last year
follows:
Standard Quantity
Standard Price (Rate)
Standard Unit Cost
Direct materials (plastic)
12
sq ft.
$
0.61
per sq. ft.
$
7.32
Direct labor
0.1
hr.
$
10.00
per hr.
1.00
Variable manufacturing overhead (based on direct labor
hours)
0.1
hr.
$
0.50
per hr.
0.05
Fixed manufacturing overhead ($160,000 ÷ 800,000 units)
0.20
Parker Plastic had the following actual results...
Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information...
Parker Plastic, Inc., manufactures plastic mats to use with
rolling office chairs. Its standard cost information for last year
follows:
Standard Quantity
Standard Price (Rate)
Standard Unit Cost
Direct materials (plastic)
12
sq ft.
$
0.63
per sq. ft.
$
7.56
Direct
labor
0.2
hr.
$
10.10
per hr.
2.02
Variable manufacturing overhead (based on direct labor hours)
0.2
hr.
$
0.60
per hr.
0.12
Fixed
manufacturing overhead $252,000 ÷ 840,000 units)
0.30
Parker Plastic
had the following actual results...
Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information...
Parker Plastic, Inc., manufactures plastic mats to use with
rolling office chairs. Its standard cost information for last year
follows: Standard Quantity Standard Price (Rate) Standard Unit Cost
Direct materials (plastic) 11 sq ft. $ 0.73 per sq. ft. $ 8.03
Direct labor 0.25 hr. $ 10.40 per hr. 2.60 Variable manufacturing
overhead (based on direct labor hours) 0.25 hr. $ 2.00 per hr. 0.50
Fixed manufacturing overhead $326,880 ÷ 908,000 units) 0.36 Parker
Plastic had the following actual results...
Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information...
Parker Plastic, Inc., manufactures plastic mats to use with
rolling office chairs. Its standard cost information for last year
follows:
Standard Quantity
Standard Price (Rate)
Standard Unit Cost
Direct materials (plastic)
15
sq ft.
$
0.90
per sq. ft.
$
13.50
Direct labor
0.25
hr.
$
12.60
per hr.
3.15
Variable manufacturing overhead
(based on direct labor hours)
0.25
hr.
$
1.80
per hr.
0.45
Fixed manufacturing overhead
$539,400 ÷ 930,000 units)
0.58
Parker Plastic had the following actual results...
Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information...
Parker Plastic, Inc., manufactures plastic mats to use with
rolling office chairs. Its standard cost information for last year
follows:
Standard Quantity
Standard Price (Rate)
Standard Unit Cost
Direct materials (plastic)
12
sq ft.
$
0.68
per sq. ft.
$
8.16
Direct labor
0.8
hr.
$
10.70
per hr.
8.56
Variable manufacturing overhead (based on direct labor
hours)
0.8
hr.
$
0.85
per hr.
0.68
Fixed manufacturing overhead $517,000 ÷ 940,000 units)
0.55
Parker Plastic had the following actual results...
Future Plastics, Inc. manufactures plastic mats to use with rolling office chairs. Its standard cost information...
Future Plastics, Inc. manufactures plastic mats to use with
rolling office chairs. Its standard cost information for last year
follows: 12 pts
Standard Quantity Standard Price
Direct Materials 12 sq ft. $0.72 per sq
ft
Direct Labor .25 hour $12.20 per hour
Variable Overhead .15hour $2 per hour
Future Plastic had actual results as follows:
Number of units produced and sold 1,000,000
Number of square feet of plastic used 11,800,000
Cost of Plastic Purchased and used $8,260,000
Number of...
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