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    Risvana Rizz
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    The document provides information to calculate contribution margin, breakeven quantity and sales target for a company. It shows that contribution margin per unit is $3, contribution margin percentage is 30%, breakeven quantity is 30,000 units and breakeven sales revenue is $300,000. It then calculates a sales target of 50,000 units to generate a profit of $30,000 plus fixed costs of $90,000 for total income of $120,000. It also provides activity rates for different production activities like fabrication, assembly, setup and material handling. It uses these rates to calculate the activity based factory overhead rate per unit for printers and scanners, showing the rates are $31.17 and $

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    The document provides information to calculate contribution margin, breakeven quantity and sales target for a company. It shows that contribution margin per unit is $3, contribution margin percentage is 30%, breakeven quantity is 30,000 units and breakeven sales revenue is $300,000. It then calculates a sales target of 50,000 units to generate a profit of $30,000 plus fixed costs of $90,000 for total income of $120,000. It also provides activity rates for different production activities like fabrication, assembly, setup and material handling. It uses these rates to calculate the activity based factory overhead rate per unit for printers and scanners, showing the rates are $31.17 and $

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    8 views2 pages

    Questions

    Uploaded by

    Risvana Rizz
    The document provides information to calculate contribution margin, breakeven quantity and sales target for a company. It shows that contribution margin per unit is $3, contribution margin percentage is 30%, breakeven quantity is 30,000 units and breakeven sales revenue is $300,000. It then calculates a sales target of 50,000 units to generate a profit of $30,000 plus fixed costs of $90,000 for total income of $120,000. It also provides activity rates for different production activities like fabrication, assembly, setup and material handling. It uses these rates to calculate the activity based factory overhead rate per unit for printers and scanners, showing the rates are $31.17 and $

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    Question 3

    a) Contribution margin per unit= selling price per unit – variable cost per unit
    =10 – 7 = $3 per unit
    b) Contribution margin percentage = contribution margin per unit / selling price per unit *100
    = 3 / 10 *100 = 30%
    c) Breakeven Quantity = fixed cost / contribution margin per unit
    = 90000 / 3
    = 30000 units
    d) Breakeven in $ = Fixed cost / contribution margin percentage
    = 90000 / 30 * 100
    =$300,000
    e) Target Profit = 30000
    New contribution = target profit + fixed cost = 30000+90000
    = 120000
    f) Income from operations

    Particulars Amount (in$)


    Sales 50000*10 500000
    Less: Variable cost 50000*7 (350000)
    Contribution 50000*3 150000
    Less : fixed cost 90000
    Net income 60000

    Question 4
    a) Activity rate for each activity

    Activity Cost driver cost No:of drivers Cost per


    activity
    fabrication dlh 300000 20000 15
    assembly dlh 120000 20000 6
    setup dlh 100000 250 400
    Material moves 80000 400 200
    handling

    Activity rates for each activity:


    Fabrication : 15
    Assembly : 6
    Setup : 400
    Material handling : 200

    b) Activity based rate for each product

    particulars printer scanner


    1) Fabrication 75000 225000
    2) Assembly 90000 30000
    3) setup 12000 88000
    4) material handling 10000 70000
    Total overhead cost 187000 413000
    units 6000 6000
    Activity based – 31.17 68.83
    factory overhead
    rate per unit

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