Managerial Accounting
Essay by Nanuka Ramishvili • October 10, 2017 • Case Study • 811 Words (4 Pages) • 806 Views
Nanuka Ramishvili
Managerial Accouting
Homework Set #1
Exercise #1
Fill in the blanks for each of the following independent cases
Case | Selling price | Variable costs per unit | Total units sold | Total contribution margin | Total fixed costs | Operating profit/loss |
a | €30 | €20 | 70 000 | €700000 (30-20)*70000 | €715000 700000-x=-15000 | -€15 000 |
b | 25 | 20 25-x=5 | 180 000 | 900 000 | 800 000 | 100000 900K-800K |
c | 12 x-10=12 | 10 | 150 000 | 300 000 | 220 000 | 80000 |
d | 20 | 14 | 20000 | 120 000 | 108000 120K-x=12K |
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Exercise #6
A company sells hand-sewn shirts for $25 per unit, and has fixed costs of $7,500. Their contribution margin ratio is 20%.
a) What is the break-even point in sales dollars?
Breakeven in $= 7500$/0.2 = 37500$
b) How many units do they have to sell to break even?
Breakeven in units = 37500$/25$ = 1500 Units
c) How much is the variable cost per unit?
25$*20%=5$
25-5=20$ variable cost per unit
e) If the company wishes to earn an operating income of $2,000, how many units need to be sold?
Selling price 25$ and variable cost 20$. Fixed cost 7500;
7500+2000=9500. 9500/(25-20)=1900 units must be sold to reach operating income of 2000
Exercise #9
The summarized profit and loss statement for ABC plc for the last year is as follows;
$ 000 | $ 000 | |
Sale (50 000 units) | 1000 | |
Direct materials | 350 V | |
Direct wages | 200 V | |
Fixed production overhead | 200 F | |
Variable production overhead | 50 V | |
Administration overhead | 180 F | |
Selling and distribution overhead | 120 F | |
Total expenses | 1100 | |
Profit /(loss) | (100) |
At a recent board meeting the directors discussed the year’s results, following which the chairman asked for suggestions to improve the situation.
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