Answer 1: Depreciation is a direct expenses in this case as both of the product have dedicated machinery and their depreciatio

X1 X2
Units Produced 2000 5000
Labour Hours Used 250 400
Labour Hours Rate 100 100
Cost of Plant and Equipment 2500000 5000000
Depreciation & Maintenenac 1% 1%
Common Cost 65000.00
Total Cost Cost Per Unit Total Cost Cost Per Unit

Direct Material 40000 20.00 62500 12.50

Direct Labour 25000 12.50 40000 8.00
Depreciation and Maintenan 25000 12.50 50000 10.00

Total Direct Cost 90000 45.00 152500 30.50

Allocated Overheads 25000 12.50 40000 8.00
Total Cost 115000 57.50 192500.00 38.50
Sales 120000 60 200000 40
Profit 5000 2.50 7500.00 1.50
Variable Cost 32.50 20.50

If price remains at 40 If price remains at 35

Sales 3000 120000 6000 210000
Variable cost 20.50 61500 20.50 123000
Contribution 58500 87000
Contribution is increasing thus its advisable to follow market leader
machinery and their depreciation and maintenance will be charged only on specific products.

Answer 2
Answer 3
Answer 4

Answer 5 Total Profit 12500.00

Answer 6

Answer 7
Answer 1: Depreciation is a direct expenses in this case as both of the product have dedicated machinery and their depreciatio

X1
Units Produced 2000
Labour Hours Used 300
Labour Hours Rate 100
Cost of Plant and Equipment 2500000
Depreciation & Maintenenace 1%
Common Cost
Total Cost

Direct Material 40000

Direct Labour 30000
Depreciation and Maintenance 25000

Total Direct Cost 95000

Allocated Overheads 32000
Total Cost 127000
Sales 120000
Profit -7000
Variable Cost

If price remains at 40
Sales 3000
Variable cost 21.50
Contribution
Contribution is increasing thus its advisable to follow market leader
t have dedicated machinery and their depreciation and maintenance will be charged only on specific products.

X1 X2
2000 5000
300 450
100 100
2500000 5000000
1% 1%
80000.00
Cost Per Unit Total Cost

20.00 62500
15.00 45000
12.50 50000

47.50 157500
16.00 48000
63.50 205500.00
60 200000
-3.50 -5500.00
35.00

If price remains at 40 If price remains at 35

120000 6000
64500 21.50
55500
y on specific products.

X2
5000
450
100
5000000
1%

Cost Per Unit

12.50
9.00
10.00

31.50 Answer 2
9.60 Answer 3
41.10 Answer 4
40
-1.10 Answer 5
21.50 Answer 6

If price remains at 35
210000
129000
81000
Answer 7
Total Profit -12500.00
Answer 1: Depreciation is a direct expenses in this case as both of the product have dedicated machinery and their depreciatio

X1
Units Produced 2000
Labour Hours Used 400
Labour Hours Rate 100
Cost of Plant and Equipment 2500000
Depreciation & Maintenenace 1%
Common Cost 50000.00
Total Cost

Direct Material 40000

Direct Labour 40000
Depreciation and Maintenance 25000

Total Direct Cost 105000

Allocated Overheads 22222
Total Cost 127222
Sales 120000
Profit -7222
Variable Cost

If price remains at 40
Sales 3000
Variable cost 22.50
Contribution
Contribution is increasing thus its advisable to follow market leader
the product have dedicated machinery and their depreciation and maintenance will be charged only on specific products.

X1 X2
2000 5000
400 500
100 100
2500000 5000000
1% 1%
50000.00
Cost Per Unit Total Cost

20.00 62500
20.00 50000
12.50 50000

52.50 162500
11.11 27778
63.61 190277.78
60 200000
-3.61 9722.22
40.00

If price remains at 40 If price remains at 35

120000 6000
67500 22.50
52500
nce will be charged only on specific products.

X2
5000
500
100
5000000
1%

Cost Per Unit

12.50
10.00
10.00

32.50 Answer 2
5.56 Answer 3
38.06 Answer 4
40
1.94 Answer 5
22.50 Answer 6

If price remains at 35
210000
135000
75000
Answer 7
Total Profit 2500.00