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production cost have been estimated at two level of output:
50,000 units 55,000 units
Prime cost 430,000 473,000
overheads 330,000 339,000Using high-low method, what are the estimated production cost per unit at an output level of 54,000 units?
(A) 14.76
(B) 14.84
(C) 15.20
(D) 17,00please helping hands?
Prime costs are purely variable and this is borne out by the figures:
430,000/50,000 = 8.6; 473,000/55,000 = 8.6
Overheads will probably be semi-variable, so as units increase by 5,000, OH increase by 9,000. This implies 9000/5000 = 1.8/unit
At 50,000 VC = 1.8 x 50,000 = 90,000, so FC = 330,000 – 90,000 = 240,000
[Check: at 55,000 VC = 1.8 x 55,000 = 99,000, so FC = 339,000 – 99,00 = 240,000]
If budgeted production is 54,000, the fixed overhead absorption rate = 240,000/54,000 = 4.44
VC = 8.6 + 1.8 = 10.4
Total cost per unit = 10.4 +4.44 = 14.84The following forecasts relate to a single product business for the period:
variable cost 38,640
fixed cost: 39,975
sales revenue: 84,000
sales units : 6,000what sales revenue is required to achieve a profit of 12,000 in the period?
(a) 74,030
(b) 90,615
(c) 96,250
(d) 112,990please i need help and explanations on this to understand how it was calculated…… thank you.
Using the formula,
Profit = Contribution Margin – Fixed Costs
Rearranging it,
CM = Profit + FCAs, the fixed costs remain the same irrespective of the activity level, so we can simply apply various profit figures to calculate what the required CM will be for a particular profit figure.
Required CM = 12,000 + 39,975 = 51,975
Now, if we divide this CM by CM/Sales %, we’ll get Sales Revenue figure. I’m leaving it for you to calculate CM/Sales %.Sales Revenue = 51,975/54% = 96,250 (C)
A company is preparing the budget for a product and the following data has been provide.
planning sales(units);month 1: 2,000
month 2: 2,000
month 3: 2,500
month 4: 2,800Closing inventory in each month be 40% of the next month’s sales. Suppliers are paid in the in the month following purchase. the standard cost of material is $4 per unit.
what is the budgeted payment to suppliers in month 3?please i need help…… thank you.
Payments to suppliers in Month-3 will be for the purchases made in Month-2.
Of the 2,000 sales, 40% will be purchased in Month 1 as the closing inventory. So, the remaining 60% will be purchased in Month-2.
The closing inventory for month-2 will be the 40% of sales of month-3, also purchased in month-2.
Month-2 Purchases:
2,000 x 60% = 1,200
2,500 x 40% = 1,000
Total Purchases = 2,200
Cost = 2,200 x $4 = $8,800 (paid in month-3)Average usage of a raw material is 200kg per day, the average ordering lead time is five days, the reorder level is 1600kg and the reorder quantity is 2000kg.
what is the average raw material inventory?
a) 800kg
b)1400kg
c)1700kg
d)2000kgplease help……
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