Top Plastics Ltd makes and sells a single product. In January 2023, it produced and sold 30,000 units. The Information pertaining selling and production costs is as follows: Selling price per unit----------------------------------------- =$25 Direct materials cost per unit ------------------------------- =$6 Direct labour cost per hour --------------------------------- =$9 Variable manufacturing overhead per unit---------------- =$2 Variable selling expenses per unit-------------------------- =$4 Fixed manufacturing overhead--------------------------- =$160,000 Fixed admin and distribution costs---------------------- =$50,000 Help the company understand the cost structure by calculating the following: Contribution margin. (03 marks) Contribution margin per unit. (03 marks) Contribution margin percentage. (03 marks) Number of units that would be required to break-even. (03 marks) Break - even amount. (03 marks) What are the limitations of CVP analysis? (04 marks)
Top Plastics Ltd makes and sells a single product. In January 2023, it produced and sold 30,000 units. The Information pertaining selling and production costs is as follows: Selling price per unit----------------------------------------- =$25 Direct materials cost per unit ------------------------------- =$6 Direct labour cost per hour --------------------------------- =$9 Variable manufacturing overhead per unit---------------- =$2 Variable selling expenses per unit-------------------------- =$4 Fixed manufacturing overhead--------------------------- =$160,000 Fixed admin and distribution costs---------------------- =$50,000 Help the company understand the cost structure by calculating the following: Contribution margin. (03 marks) Contribution margin per unit. (03 marks) Contribution margin percentage. (03 marks) Number of units that would be required to break-even. (03 marks) Break - even amount. (03 marks) What are the limitations of CVP analysis? (04 marks)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
- Top Plastics Ltd makes and sells a single product. In January 2023, it produced and sold 30,000 units. The Information pertaining selling and production costs is as follows:
Selling price per unit----------------------------------------- =$25
Direct materials cost per unit ------------------------------- =$6
Direct labour cost per hour --------------------------------- =$9
Variable manufacturing
Variable selling expenses per unit-------------------------- =$4
Fixed manufacturing overhead--------------------------- =$160,000
Fixed admin and distribution costs---------------------- =$50,000
Help the company understand the cost structure by calculating the following:
- Contribution margin. (03 marks)
- Contribution margin per unit. (03 marks)
- Contribution margin percentage. (03 marks)
- Number of units that would be required to break-even. (03 marks)
- Break - even amount. (03 marks)
- What are the limitations of CVP analysis? (04 marks)
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