Question

2. BoriTech Company manufactures Video Consoles. The selling price of each Video Console is $42.55, Raw materials per unit is $11, overhead per unit is $2, direct labor per unit is $1, and total fixed costs are $2,251,000. Calculate the following: (5 points)

a.Variable cost per unit

b.contribution margin

c. breakeven point in units

d. breakeven level of sales

e.       How many Video Consoles BoriTech Company need to manufacture to achieve a desired income of $500,000.

Answer 1

1) BoriTech Company Variable cost per unit:

Raw materials : $11 per unit

Direct Labour : $1 per unit

Over head : $ 2 Per unit

Total variable cost per unit = $14

Bori Tech Company need to manufacture 96357.27 units inorder to earn Income $500,000.

Note : All answers are Calculated for two Decimals.

contribution margin per unit Contribution margin per unit 28.55 Sales variable cost 42.55 14 Break - even-point (Units Fixed cost -Contribution margin per unitBreak even point (Units 2,251,000 28.55 78,844.13 Bep in Dollars Sales Bep in units 78,844 4 Selling price per unitX Bep in Dollars $42.55 $3,354,812.20 Desire Income (units Contribution margin per unit 28.55 Fixed cost Desire (Units) 96357.27 Desire Income 2,251,000 500,000