Question

he accountant of Alpha Ltd. predicted the following costs for the production of 15.000 wine bottles...

he accountant of Alpha Ltd. predicted the following costs for the production of 15.000 wine bottles (amounts in EUR)

   Wine production
   9.000 bottles   15.000 bottles   21.000 bottles
Variable production cost   ?   45.000   ?
Fixed production cost   ?   60.000   ?
Variable operating cost   ?   3.000   ?
Fixed operating cost   ?   25.000   ?


Sales manager predicted the following average selling price per bottle

       Sales of wine  
   9.000 bottles   15.000 bottles   21.000 bottles
Selling price for 1lt bottle   14   13   12

Assuming that the variable cost per unit does not change with the change in production volume:

a.   Fill in the question marks in the table and find out the variable, fixed and total cost per unit in all activity levels. Explain what you observe.
b.   Calculate the overall results (profit/loss) assuming that the company will sell its stock. To which activity level the profit is maximized ?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1


0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. Based on predicted production of 25,900 units, a company anticipates $400,000 of fixed costs and...
1. Based on predicted production of 25,900 units, a company anticipates $400,000 of fixed costs and $492,100 of variable costs. If the company actually produces 19,800 units, what are the flexible budget amounts of fixed and variable costs? ------Flexible Budget------ ------Flexible Budget at ------ Variable Amount per Unit Total Fixed Cost 25,900 units 19,800 units Total budgeted costs 2. SBD Phone Company sells its waterproof phone case for $90 per unit. Fixed costs total $194,400, and variable costs are $36...
Ultease Corporation has many production plants across the midwestern United States. A newly opened plant, the...
Ultease Corporation has many production plants across the midwestern United States. A newly opened plant, the Bellingham plant, produces and sells one product. The plant is treated, for responsibility accounting purposes, as a profit center. The unit standard costs for a production unit, with overhead applied based on direct labor hours, are as follows. Manufacturing costs (per unit based on expected activity of 24,000 units or 36,000 direct labor hours): Direct materials (2 pounds at $20) $ 40.00 Direct labor...
Based on a predicted level of production and sales of 15,000 units, a company anticipates total...
Based on a predicted level of production and sales of 15,000 units, a company anticipates total variable costs of $48,000, fixed costs of $21,000, and operating income of $81,600. Based on this information, the budgeted amount of operating income for 12,000 units would be: Multiple Choice $61,080. $82,080. $13,080. $38,400. $120,480. Fletcher Company collected the following data regarding production of one of its products. Compute the variable overhead spending variance. Direct labor standard (3.00 hrs. @ $18.20/hr.) $ 54.60 per...
. Assume that the CDE Company has yearly Fixed costs of $30,000 and its Variable costs...
. Assume that the CDE Company has yearly Fixed costs of $30,000 and its Variable costs are $30,000, which are 60% of its Sales. Calculate: [Use ONLY formula for your calculations. Do NOT use algebra] Question: Its profit or loss when its total sales are $110,000.      b. The sales level (dollars) required to break-even.      c. The sales needed to make a profit of $35,000. 2. ABC Company manufactures and distributes Product A. An extract from the 20X5 statement...
Part 4 USB Inc. predicted 2018 variable and fixed costs are as follows: Company budgeted for:...
Part 4 USB Inc. predicted 2018 variable and fixed costs are as follows: Company budgeted for: 43,200 Units Variable costs Fixed costs Manufacturing 734,400 172,800 Selling and Administrative 216,000 60,500 Total 950,400 233,300 USB Inc. produces a wide variety of computer interface devices. Per unit manufacturing cost information about one of these products, a high-capacity flash drive is as follows: Direct material $6 Direct labor 8 Variable Manufacturing Overhead 3 Fixed Manufacturing Overhead -allocated per unit 4 Total manufacturing costs...
Part 4 USB Inc. predicted 2018 variable and fixed costs are as follows: Company budgeted for:...
Part 4 USB Inc. predicted 2018 variable and fixed costs are as follows: Company budgeted for: 43,200 Units Variable costs Fixed costs Manufacturing 734,400 172,800 Selling and Administrative 216,000 60,500 Total 950,400 233,300 USB Inc. produces a wide variety of computer interface devices. Per unit manufacturing cost information about one of these products, a high-capacity flash drive is as follows: Direct material $6 Direct labor 8 Variable Manufacturing Overhead 3 Fixed Manufacturing Overhead -allocated per unit 4 Total manufacturing costs...
11. Which of the following costs is least likely to be a variable cost? sales commissions...
11. Which of the following costs is least likely to be a variable cost? sales commissions direct labor indirect materials supervisory salaries 12. Which of the following components are included in a mixed cost? a sunk cost and an opportunity cost a fixed cost and a variable cost a manufacturing cost and a selling cost a product cost and a period cost 13. Kari’s Kookies has total costs of $5,000 when 2,000 units are produced and $11,000 when 5,000 units...
Utease Corporation has many production plants across the midwestern United States. A newly opened plant, the...
Utease Corporation has many production plants across the midwestern United States. A newly opened plant, the Bellingham plant, produces and sells one product. The plant is treated, for responsibility accounting purposes, as a profit center. The unit standard costs for a production unit, with overhead applied based on direct labor hours, are as follows. Manufacturing costs (per unit based on expected activity of 23,000 units or 57,500 direct labor hours): Direct materials (3.0 pounds at $20) $ 60.00 Direct labor...
Breed Products has performed extensive studies on its costs and production and estimates the following annual...
Breed Products has performed extensive studies on its costs and production and estimates the following annual costs based on 154,000 units (produced and sold): Total Annual Costs (154,000 units) Direct material $ 291,000 Direct labor 261,000 Manufacturing overhead 207,000 Selling, general, and administrative 132,000 Total $ 891,000 Required: a. Compute Breed’s unit selling price that will yield a profit of $448,800, given sales of 154,000 units. (Round your answer to 2 decimal places.) b. Compute Breed’s dollar sales that will...
Breed Products has performed extensive studies on its costs and production and estimates the following annual...
Breed Products has performed extensive studies on its costs and production and estimates the following annual costs based on 151,000 units (produced and sold): Total Annual Costs (151,000 units) Direct material $ 298,000 Direct labor 258,000 Manufacturing overhead 209,000 Selling, general, and administrative 149,000 Total $ 914,000 Required: a. Compute Breed’s unit selling price that will yield a profit of $596,000, given sales of 151,000 units. (Round your answer to 2 decimal places.) b. Compute Breed’s dollar sales that will...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT