Total semi fixed unit (Rs) 60,000 12 1,20,000 11 1,80,000 10 2,40,000 9 3,00,000 8 3,60,000 7 cost (Rs) 7. A company's flexible budget reveals the following market conditions and costs: Output in units Selling price per Total variable cost (Rs) Total fixed cost (Rs) 1,50,000 4,18,000 1,42,000 1,50,000 8,18,000 1,42,000 1,70,000 12,78,000 1,42,000 1,70,000 15,78,000 1,42,000 2,00,000 17,78,000 1,42,000 2,00,000 19,02,000 1,42,000 a) Prepare a schedule showing the total Differential Cost and Incremental Revenue. b) At what level, should the company set its level of production? c) What selling price should be established in order to obtain the most profitable operations for the years?

Total semi fixed unit (Rs) 60,000 12 1,20,000 11 1,80,000 10 2,40,000 9 3,00,000 8 3,60,000 7 cost (Rs) 7. A company's flexible budget reveals the following market conditions and costs: Output in units Selling price per Total variable cost (Rs) Total fixed cost (Rs) 1,50,000 4,18,000 1,42,000 1,50,000 8,18,000 1,42,000 1,70,000 12,78,000 1,42,000 1,70,000 15,78,000 1,42,000 2,00,000 17,78,000 1,42,000 2,00,000 19,02,000 1,42,000 a) Prepare a schedule showing the total Differential Cost and Incremental Revenue. b) At what level, should the company set its level of production? c) What selling price should be established in order to obtain the most profitable operations for the years?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 42E: Sales Revenue Approach, Variable Cost Ratio, Contribution Margin Ratio Arberg Companys controller...

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The following details relates to the operations of a company for budgeted output of 10000units; selling price- GHC100, total variable cost- GH¢200000, and total fixed cost- GHC400000. At what quantity and value will the company breakeven? A. 5000units and GHC50000 B. 5000units and GHC5300 OC. 4500units and GHC45000 D. 4000unit and GHC40000
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Required Information [The following information applies to the questions displayed below.] The fixed budget for 21,500 units of production shows sales of $559,000; variable costs of $64,500; and fixed costs of $142,000. If the company actually produces and sells 26,500 units, calculate the flexible budget Income. Sales Variable costs Contribution margin Fixed costs Income ------Flexible Budget-..... Variable Amount Total Fixed per Unit Cost $ 689,000 689,000 ------Flexible Budget at 21,500 units $ $ 0 0 26,500 units $ $ 0 0
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Sales Revenue Approach, Variable Cost Ratio, Contribution Margin Ratio Arberg Companys controller prepared the following budgeted income statement for the coming year: Required: 1. What is Arbergs variable cost ratio? What is its contribution margin ratio? 2. Suppose Arbergs actual revenues are 30,000 more than budgeted. By how much will operating income increase? Give the answer without preparing a new income statement 3. How much sales revenue must Arberg earn to break even? Prepare a contribution margin income statement to verify the accuracy of your answer. 4. What is Arbergs expected margin of safety? 5. What is Arbergs margin of safety if sales revenue is 380,000?
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The data to the right pertain to the operating budget of a manufacturing company. Compute the following (a) contribution margin (b) contribution rate (c ) break - even point in sales dollars \table[[\ table[[Sales], [Fixed cost], [Total variable cost]], \table[[$145,000