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STEIL manufactures a chainsaw that it sells for $55. Direct material costs are $8.45 per unit. Direct labor per unit requires 0.5 hours @ $25 per hour. Variable over head is $4.90 per unit. Fixed annual overhead is $35,000.

What is the margin per unit?

What is the breakeven unit volume?

What is the break even sales volume?

What is the profit or loss for 2,000 units?

Answer #1

Selling Price = 55

Variable cost

Direct material = 8.45

Direct labor = 0.5 per hour @ $25 per hour = 12.5

Variable Overhead = 4.9

Total VC per unit = 25.85

Total FC = 35,000

**What is the margin per unit?**

Margin per unit = Sales price per unit – VC per unit

Margin per unit = 55 – 25.85 = 29.15

**What is the breakeven unit volume?**

Break even units = FC/Margin per unit

Break even units = 35,000/29.15 = 1201 units (1200.68 units)

**What is the break even sales volume?**

Break Even Sales = Fixed Cost / Profit-volume Ratio

Profit-volume Ratio = (Contribution / Price)*100

Profit-volume Ratio = (29.15 / 55)*100 = 53%

Break Even Sales = 35,000 / 53% = 66,037.7

**What is the profit or loss for 2,000 units?**

At 2,000 units Total Cost = 35,000 + (2000*25.85) = 86,700

At 2,000 units Total Revenue = 2,000 * 55 = 110,000

Profit = TR – TC

Profit = 110,000 – 86,700 = 23,300

19., Cobee, Inc. manufactures chainsaws. Each chainsaw uses $10
in direct materials and $3 in direct labor per unit. Cobee has two
activities: Machining, which is applied at the rate of $2 per
machine hour, and Finishing, which is applied at the rate of $20
per batch. This month, Cobee made 200 chainsaws, using 1,000
machine hours in 40 batches. What is the total manufacturing cost
for one chainsaw?
.
Alberver, Inc. manufactures jumbers that sell for $40. Each
jumber...

A firm sells its product for $40 per unit. Its direct material
costs are $7 per unit and direct labour costs are $3. Fixed
manufacturing overhead costs are $68,750 and variable overhead
costs are $8 per unit. Calculate the required sales in dollars to
break even.

Cobee, Inc. manufactures chainsaws that sell for $60. Each
chainsaw uses $10 in direct materials and $3 in direct labor per
unit. Cobee has two activities: Machining, which is applied at the
rate of $2 per machine hour, and Finishing, which is applied at the
rate of $20 per batch. This month, Cobee made 200 chainsaws, using
1,000 machine hours in 40 batches. What is the gross profit for one
chainsaw? a. $13 b. $27 c. $33 d. $47

Consider the following for the costs of a pair of jeans:
Direct material costs: $2 per yard and 3 yards are needed
Direct labor costs: $20 per hour and 0.5 hours are needed
Overhead costs: $5 per hour and 1 hour is needed
What is the total cost to make a pair of jeans?

Sormac Corporation manufactures and sells hand
radios. Price and cost data are as follows:
Selling price per unit
$30.00
Variable cost per unit
Direct material
$9.80
Direct labor
$4.80
Manufacturing overhead
$7.20
Selling expenses
$1.90
Total
Variable Cost per Unit
$23.70
Annual fixed cost
Manufacturing overhead
$96,800
Selling and administrative
$42,400
Total Fixed Cost
$139,200
Forecasted annual sales volume (168,000 units)
What is Sormac Corporation break-even point in units?
What is the company’s break-even point in sales dollars?
How many units...

Hillbilly Inc. manufactures beautiful handmade rocking chairs
with the following standard costs:
Direct Materials 30 bd ft. @ $0.70 per bd. ft.........$21
Direct labor 6 hours @ $5.00 per hour..................30
Factory overhead - applied at 2/3 of labor costs....20
Total standard cost per unit of
output......................71
Standards are based on normal monthly production of 3600 direct
labor hours for 600 units of output. The following information
pertains to October activities:
Units produced in October..........................700 units
Direct materials purchased 22,500 bd....

QUESTION 1
A company manufactures and sells a single product which has the
following cost and selling price structure: £/unit £/unit Selling
price 120 Direct material 22 Direct labour 36 Variable overhead 14
Fixed overhead 12 84 Profit per unit 36 The fixed overhead
absorption rate is based on the normal capacity of 2,000 units per
month. Assume that the same amount is spent each month on fixed
overheads. Budgeted sales for next month are 2,200 units.
You are required...

1.
Wang Co. manufactures and sells a single product that sells for
$540 per unit; variable costs are $324 per unit. Annual fixed costs
are $836,000. Current sales volume is $4,290,000. Compute the
contribution margin per unit.
2.
A firm expects to sell 24,800 units of its product at $10.80 per
unit and to incur variable costs per unit of $5.80. Total fixed
costs are $68,000. The total contribution margin is:
3.
McCoy Brothers manufactures and sells two products, A...

Selling price per unit
$30.00
Variable costs per unit:
Direct material
$5.25
Direct manufacturing labour
$2.15
Manufacturing overhead
$1.64
Selling costs
$1.85
Annual fixed costs
$110,000
The Geraldo Inc. contribution margin ratio is
110.2%
142.5%
29.8%
70.2%
63.7%
The Geraldo Inc. break-even point in sales dollars is
$99,819.
$77,193.
$172,685.
$172,684.
$156,695.
The Geraldo Inc. break-even point in units is
5,757 units.
3,502 units.
5,756 units.
6,059 units.
12,952 units.

The unit sales for the month was 8,000 and the total sales was
$480,000. The direct labor wage rate is $10 per hour and each kg of
raw material is $2. Each unit of finished goods requires 3 direct
labor hours and 5 kg of raw materials. If we assume that there is
no fixed overhead and the variable overhead is $2.5 per direct
labor hour, what is the gross margin percentage?

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