CFM

1st test

1. The company manufactures and sells two types of products. Information on the company's
projected performance is as follows:

Characteristics Product types Total

A B

1. Production, proportion 1 1,8 X

2. Selling price , euro / units 15 10 X

4. Variable costs, euro /units 7 6 X

5.Fixed costs, euro 140 000,00

Determine the product of A and B in the production and sales critical units (where the profit
is equal to 0) and sales critical unit with desire profit 20 000,-

2. The company manufactures two products - A and B.

Item name A B

Direct material costs (euro per unit) 4 6

Direct labor cost (euro per hour) 2 3

Variable overheads 4 5

Labour time, hours per unit 3 2

Material B for production, kg 3,5 5

Sales price 24 28

Demand for the products (in units) 1800 5200

Company can use direct labor time, 28 000 hours and material B 32 000 kg.
What is the product production plan which will ensure maximum profit, assuming that the
fixed cost per month is 26 100 euro, and that there is not any product stock at the beginning
of period?
3. Company manufactures and sells men’s suits. Each suit sells for 800,- fixed costs are 200
000,- and variable costs are 250,- per suit.
a) What is the firm’s operating income on sales of 600 suits; on sales of 3000 suits?
b) Calculate company’s breakeven point in sales units
c) If the cost of material increases so that variable costs are now 350,- per suit, what will be
new breakeven point?
d) Considering the increase in variable costs, by how much will need to increase the selling
price per suit to reach the original operating income for sales of 600 suits calculated in part
a?

4. Christian's Consulting Service employs 10 full-time consultants and 5 assistants. The direct
and indirect costs are applied on a consultant labor-hour basis that includes both the
consultants and assistant hours. The following information was reported by the accountant in
2019.
Budget Actual
Indirect costs $200,000 $250,000
Annual Salary of each consultant $100,000 $150,000
Annual salary of each assistant $45,000 $55,000
Total professional labor hours 40,000 h 55,000 h

Compute the actual direct-cost rate and the actual indirect-cost rate per professional labor-
hour.