Question

In: Accounting

Al Razzaq Fabrics is famous textile manufacturing concern in Oman. Their main products are basic T-shirts...

Al Razzaq Fabrics is famous textile manufacturing concern in Oman. Their main products are basic T-shirts made from pure cotton. Their current full capacity is 300 units per day. At the moment they are selling their product to local garment retailers at OMR 3.2 per unit. The company is analyzing its last years’ financial statement. The relevant information is given below:

OMR

Revenue

216000

Direct material cost

56160

Indirect material cost

8100

Direct labor cost

32500

Indirect labor

4600

Transportation of sold units

3650

Salaries of staff and management

40560

Insurance

2400

Marketing and promotion

3600

Building rent and tax

6600

Cost of electricity

4800

Total cost

162820

Operating income

53180

Income Tax @ 25%

13295

Net Profit

39885

a) Based on the data given above, how many units the company must sell to break even?

b) If the company would have done an extensive marketing, they could increase the price by 8%. This marketing and promotion will additionally cost the OMR 21000. How will this situation affect the break-even point?

c) Considering that there are 250 working days in a year, what will be the after tax profit, if the company operates at its full capacity?

d) How many units the company must sell to yield an after tax profit of OMR 45000?

e) What is the margin of safety, if the company is able to produce and sell its full capacity?

Solutions

Expert Solution

Answer:

Please up vote the solution if it helpful...........Thank you

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Consider the following information for a T-shirt manufacturing firm that can sell as many T-shirts as...
Consider the following information for a T-shirt manufacturing firm that can sell as many T-shirts as it wants for $10 per shirt. # of Workers # of shirts produced per day MPI TR MRPI 0 0 1 40 2 85 3 135 4 195 5 50 6 285 7 315 8 200 9 100 a) Fill in the missing parts of the above table. b) Verify that MRPl can be calculated in two ways: by change in TR and MPl...
Big Al Athletic Apparel annually sells 20,000 University of West Florida branded cotton T-shirts through distributors...
Big Al Athletic Apparel annually sells 20,000 University of West Florida branded cotton T-shirts through distributors who then sell the shirts for $15 to retailers like Dick’s Sporting Goods who then sell them on to consumers for $25 each. Big Al’s costs of goods are $5 per shirt and they are required to pay a licensing fee to UWF for $1 for every shirt that they sell via distributors. This fee is only charged on those shirts sold to the...
Bobcat Printing makes custom t---shirts and other promotional products for student organizations and businesses. It is...
Bobcat Printing makes custom t---shirts and other promotional products for student organizations and businesses. It is beginning its first year of operations and needs to plan for its first quarter of operations. They would like to maximize their profits, and understand that accurate budgeting can help achieve that goal. The budgets will be prepared based on the following information: a. Sales are budgeted at $20,000 for Month 1, $25,000 for Month 2, and $27,000 for Month 3. All sales will...
Bobcat Printing makes custom t---shirts and other promotional products for student organizations and businesses. It is...
Bobcat Printing makes custom t---shirts and other promotional products for student organizations and businesses. It is beginning its first year of operations and needs to plan for its first quarter of operations. They would like to maximize their profits, and understand that accurate budgeting can help achieve that goal. The budgets will be prepared based on the following information: a. Sales are budgeted at $20,000 for Month 1, $25,000 for Month 2, and $27,000 for Month 3. All sales will...
Bobcat Printing makes custom t---shirts and other promotional products for student organizations and businesses. It is...
Bobcat Printing makes custom t---shirts and other promotional products for student organizations and businesses. It is beginning its first year of operations and needs to plan for its first quarter of operations. They would like to maximize their profits, and understand that accurate budgeting can help achieve that goal. The budgets will be prepared based on the following information: a. Sales are budgeted at $20,000 for Month 1, $25,000 for Month 2, and $27,000 for Month 3. All sales will...
Business Budget Project Bobcat Printing makes custom t - -- shirts and other promotional products for...
Business Budget Project Bobcat Printing makes custom t - -- shirts and other promotional products for student organizations and businesses. It is beginning its first year of operations and needs to plan for its first quarter of operations. They would like to maximize their profits, and understand that accurate budgeting can help achieve that goal. The budgets will be prepared based on the following information: a. Sales are budgeted at $ 20,000 for Month 1, $ 2 5,0 00 for...
Q.3 Mohammed Garment Industry workers produce T- Shirts. The three basic processes of garment production are...
Q.3 Mohammed Garment Industry workers produce T- Shirts. The three basic processes of garment production are cutting, sewing and pressing. According to the Labour department there are 5 sewing operator, 10 cutting operators and 8 pressing operators. the Standard rate per hour for operators is OMR 25, Normal rate per hour is OMR 30, Normal rate per unit is OMR 25, Working hours per day are 8 hours, Standard Output per hour is 120 units. Five workers Khalid, Rashid, Ahmed,...
SuperDry Manufactures and sells T-shirts for all kinds of events. The company has two manufacturing operations-...
SuperDry Manufactures and sells T-shirts for all kinds of events. The company has two manufacturing operations- shirt-making and printing. When the company receives an order, the shirt-making department obtains the materials requested and has the fabric cut and sewn to sizes. The ready T-shirts are then sent to the printing department where the customer labels or design are prepared and printed onto the surface with hot press machines. SuperDry has three support departments- Building Maintenance, Human Resources and Design &...
The Happy Cow manufacturing (THC) makes different types of cheeses and related products. Its most famous...
The Happy Cow manufacturing (THC) makes different types of cheeses and related products. Its most famous cheese is Queso Fresco. In order to make one pound of Queso Fresco, it requires 5 quarts of milk. THC processes milk in batches of 20,000 quarts. These 20,000 quarts of milk also yield whey, a common food supplement. For every quart, the milk will yield 1.75 pounds of whey. THC pays $1.5 for each gallon of milk. They make one batch per month....
Billy's Blues sells 3 types of T-shirts: Astro, Bling, and Curious. Manufacturing Astros requires 2 minutes...
Billy's Blues sells 3 types of T-shirts: Astro, Bling, and Curious. Manufacturing Astros requires 2 minutes of machine time and 20 minutes of labor, and costs $10. Brand Bling requires 2.5 minutes of machine time and 30 minutes of labor, and costs $14 to produce. Brand Curious requires 3 minutes of machine time and 45 minutes of labor, and costs $18 to produce. There are 300 machining hours available per week, 3750 labor hours, and he has a budget of...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT