a) Company ABC's annual sales were $100,000, its variable costs $40,000 and its fixed costs $50,000....

Transcribed Image Text:

a) Company ABC's annual sales were $100,000, its variable costs $40,000 and its fixed costs $50,000. Calculate the profit for the year using the marginal cost equation. (5 marks) b) You as the finance director of your company were presented by your manufacturing director the following information: X(S) Y (S) Z(S) Total ($) 97,500 Product Sales 5,500 50,000 42,000 Less: Variable cost 4,000 35,000 25,700 64,700 Contribution 1,500 15,000 16,300 32,800 Less: Fixed cost Profit 11,000 21,800 Additional information: Assume that your company first began manufacturing and selling Product X which was then followed by Product Y and Product Z. Its fixed costs remained constant at $10,000, irrespective of the variability of its production. Required: Prepare a profit/volume chart showing the impact on its profit/ (loss) of the individual product ranges. (10 marks) a) Company ABC's annual sales were $100,000, its variable costs $40,000 and its fixed costs $50,000. Calculate the profit for the year using the marginal cost equation. (5 marks) b) You as the finance director of your company were presented by your manufacturing director the following information: X(S) Y (S) Z(S) Total ($) 97,500 Product Sales 5,500 50,000 42,000 Less: Variable cost 4,000 35,000 25,700 64,700 Contribution 1,500 15,000 16,300 32,800 Less: Fixed cost Profit 11,000 21,800 Additional information: Assume that your company first began manufacturing and selling Product X which was then followed by Product Y and Product Z. Its fixed costs remained constant at $10,000, irrespective of the variability of its production. Required: Prepare a profit/volume chart showing the impact on its profit/ (loss) of the individual product ranges. (10 marks)

Answer rating: 100% (QA)

CVP analysis A methodology of cost accounting that looks at the effect ... View the full answer