Access over 20 million homework & study documents

search

Assignment 2 2242 chapters 4 5 due may 31st solution

Content type
User Generated
Rating
Showing Page:
1/5

Sign up to view the full document!

lock_open Sign Up
Showing Page:
2/5

Sign up to view the full document!

lock_open Sign Up
Showing Page:
3/5

Sign up to view the full document!

lock_open Sign Up
End of Preview - Want to read all 5 pages?
Access Now
Unformatted Attachment Preview
Accounting 2242 – Assignment #2 – Chapters 4 & 5 CVP – ABC Company – Chapter 4 The following information pertains to ABC Company and its product – Product Z: Selling Price per unit Direct Material Cost per kg Direct Labour Cost per unit Variable Overhead cost per unit Material required per unit Other variable expenses per unit Annual Fixed Costs: Advertising Fixed Manufacturing Other Fixed Expenses $45.00 $2.00 $1.20 $0.80 2 KGS $0.60 $15,000 $60,000 $8,000 Required: 1. What is the Breakeven Point in both units and sales dollars? For this you will need to calculate both the Contribution Margin and the Contribution Margin Ratio – be sure to show all your work for full points. 2. Assume the company has a target profit of $400,000, what is the breakeven point in both units and sales dollars? Show all your work. 3. If ABC company chose to discontinue advertising and instead pay $3 per unit as a commission, what would the breakeven point be in both units and sales dollars? Solution to CVP: Part A: Break Even point: Selling Price Direct material ($2 x 2kg) Direct Labour VOH Other Variable Costs Total Variable Costs Contribution Margin Per Unit $45.00 $ 4.00 1.20 0.80 0.60 $ 6.60 $38.40 2 BE in Units: FC/ Unit CM = $83000/38.40 = 2161 units 1.5 BE in Sales $$: $83000 / 85.33% = $97,266 1.5 PART B: BE in Units: FC + TOI / CM unit = 83000 + 400000 / 38.40 = 12579 units 1.5 BE in Sales $$: FC + TOI / CM ratio = 83000 + 400000 / 85.33% = $566,038 1.5 PART C: Chang ...
Purchase document to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Anonymous
Really helped me to better understand my coursework. Super recommended.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4