Chelsea Inc. manufactures and sells Steel golf Shafts. The following are forecast for january 2022: Estimated...

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Chelsea Inc. manufactures and sells Steel golf Shafts. The following are forecast for january 2022: Estimated cans of sales 10,000 units Selling price per unit 10.00 Direct materials per unit 2 pounds of steel at $0.40 per pound 0.5 pounds of alloy at $3.00 per pound Direct labor per unit $2.60 per unit Manufacturing Overhead Variable Overhead $1.10 per unit Plant and equipment depreciation $20,000.00 per month $15,000.00 per month Miscellaneous The plant and equipment depreciation and miscellaneous costs are fixed and all other costs are variable. Plant capacity is 20,000 units monthly. Required: a) Compute the company's breakeven point in unit and sales in Dollar. Use the equation method. (4 marks) b) Assume that next month management wants the company to earn a profit of at least $85,000. How many units must be sold to meet this target profit? (3 marks) c) Refer to the original data. Compute the company's margin of safety in both Dollar and percentage form. (3 marks) d) Refer to the original data. In an effort to increase sales and profits, management is considering the use of a higher quality steel. The cost of the steel would increase by $0.20 per pound, but management could eliminate one quality inspector who is paid a salary of $3,500 per month. The sales manager estimates that the higher quality steel would increase annual sales by at least 20%. Prepare a projected contribution format statement of comprehensive income for next year, based on the above mentioned changes. Show i. Chelsea Inc. manufactures and sells Steel golf Shafts. The following are forecast for january 2022: Estimated cans of sales 10,000 units Selling price per unit 10.00 Direct materials per unit 2 pounds of steel at $0.40 per pound 0.5 pounds of alloy at $3.00 per pound Direct labor per unit $2.60 per unit Manufacturing Overhead Variable Overhead $1.10 per unit Plant and equipment depreciation $20,000.00 per month $15,000.00 per month Miscellaneous The plant and equipment depreciation and miscellaneous costs are fixed and all other costs are variable. Plant capacity is 20,000 units monthly. Required: a) Compute the company's breakeven point in unit and sales in Dollar. Use the equation method. (4 marks) b) Assume that next month management wants the company to earn a profit of at least $85,000. How many units must be sold to meet this target profit? (3 marks) c) Refer to the original data. Compute the company's margin of safety in both Dollar and percentage form. (3 marks) d) Refer to the original data. In an effort to increase sales and profits, management is considering the use of a higher quality steel. The cost of the steel would increase by $0.20 per pound, but management could eliminate one quality inspector who is paid a salary of $3,500 per month. The sales manager estimates that the higher quality steel would increase annual sales by at least 20%. Prepare a projected contribution format statement of comprehensive income for next year, based on the above mentioned changes. Show i.

Answer rating: 100% (QA)

A Given Selling price per unit 10 Direct material cost per unit 2 040 050 3 080150 230 Direct labour ... View the full answer