Carbondale Corporation is a manufacturer of converters sold on a private label basis to large discount chains. The company has capacity to produce 45,000 converters a year. Planned production for the current year is 20,000 units and involves working the plant for a single shift. An analysis of the company’s cost records reveals the following information for the 20,000 units production level:

Variable manufacturing cost per unit: Ksh 8

Variable Selling and Administration costs per unit: Ksh2

Fixed manufacturing costs: Ksh60, 000

Fixed Selling and Administration costs: Ksh40, 000

Current selling price per unit: Ksh18

Required:

i) Determine the contribution margin and the contribution margin ratio 

ii) Determine the profits arising from the sales revenue of Ksh 9,000,000 

iii) Determine the sales required in units and value to yield a profit of Ksh 500,000

iv) Determine the breakeven point in units and value 

v) Plot the cost-volume-profit chart 

Answer rating: 100% (QA)

i Contribution margin per unit Selling price per unit Variable cost per unit Ksh 18 Ksh 8 Ksh 2 Ksh ... View the full answer