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- August 16, 2017 at 8:33 am #402007
Deb is setting up a business printing newspaper and magazines. The following cost information is available
Newspaper Magazine
sp 3 4
Direct Mat
Paper 0.4 0.5
ink 0.2 0.3Direct Labour 0.6 0.8
Variable OH 0.3 0.45
Fixed OH 0.9 0.8Profit/unit 0.6 1.15
Bdgt production 1000 units/week 3000 units/month
Deb is going to start by only printing newspapers.
How many units needs to be sold to breakeven?
Answer calculated FC as =(52 x 1000 x 0.9)+(3000, x 0.8 x 12) =75600.
What I don’t understand is where the 52 and 12 is coming from and also why we are not multiplying newspaper production by 4 weeks since the we’re working in weeks.
Please help.
August 16, 2017 at 10:21 am #40203552 is the number of weeks in a year; 12 is the number of months in a year !!!
August 16, 2017 at 12:29 pm #402054Oh.. I see.. Thanks a lot.
August 16, 2017 at 4:59 pm #402103You are welcome 🙂
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