Top Wood is a small manufacturing company currently making a single type of chair. The managing director presents to you the following details of estimated revenue and cost per unit for the year ended 31 December 2021: Quantity (Units) 2,000 |Number of Chairs made and sold Price per unit (RM) 100 | Selling price Total variable cost per unit: Raw material Direct labour Manufacturing overheads | Selling cost RM 15 16 11 8 The following information is taken into consideration: Total manufacturing overheads cost estimated for the year amounting to (1) $110,000 of which 20% is variable manufacturing overhead cost. The company's total selling costs for the year amounting to S19,500 inclusive of fixed and variable costs. (2) (3) All units produced can be sold as soon as they are made, and no stocks are kept. (4) The directors have been considering their plan for the year ending 31 December 2021. The company intends to increase the sales by 30% if the fixed selling costs increase by $14,964 and the direct labour cost per unit increase to $18. Required:_ (1) Compute the sales units required to eam targeted profit of $15,000. Calculate the new break-even point in units, amount in sales and total profit if new plan in note (4) is implemented. (ii)
Top Wood is a small manufacturing company currently making a single type of chair. The managing director presents to you the following details of estimated revenue and cost per unit for the year ended 31 December 2021: Quantity (Units) 2,000 |Number of Chairs made and sold Price per unit (RM) 100 | Selling price Total variable cost per unit: Raw material Direct labour Manufacturing overheads | Selling cost RM 15 16 11 8 The following information is taken into consideration: Total manufacturing overheads cost estimated for the year amounting to (1) $110,000 of which 20% is variable manufacturing overhead cost. The company's total selling costs for the year amounting to S19,500 inclusive of fixed and variable costs. (2) (3) All units produced can be sold as soon as they are made, and no stocks are kept. (4) The directors have been considering their plan for the year ending 31 December 2021. The company intends to increase the sales by 30% if the fixed selling costs increase by $14,964 and the direct labour cost per unit increase to $18. Required:_ (1) Compute the sales units required to eam targeted profit of $15,000. Calculate the new break-even point in units, amount in sales and total profit if new plan in note (4) is implemented. (ii)
Chapter5: Process Costing
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Transcribed Image Text:Top Wood is a small manufacturing company currently making a single type of
chair. The managing director presents to you the following details of estimated
revenue and cost per unit for the year ended 31 December 2021:
Quantity
(Units)
2,000
Number of Chairs made and sold
Price per unit
(RM)
100
Selling price
Total variable cost per unit:
RM
Raw material
15
Direct labour
16
Manufacturing overheads
Selling cost
11
8
The following information is taken into consideration:
(1)
Total manufacturing overheads cost estimated for the year amounting to
$110,000 of which 20% is variable manufacturing overhead cost.
The company's total selling costs for the year amounting to $19,500
inclusive of fixed and variable costs.
(2)
(3)
All units produced can be sold as soon as they are made, and no stocks
are kept.
(4)
The directors have been considering their plan for the year ending 31
December 2021. The company intends to increase the sales by 30% if
the fixed selling costs increase by $14,964 and the direct labour cost
per unit increase to $18.
Required:
(1)
Compute the sales units required to earn targeted profit of $15,000.
(ii)
Calculate the new break-even point in units, amount in sales and total
profit if new plan in note (4) is implemented.
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