High Tide is a one product business and manufactures board short for men. They operate out...

 
 

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High Tide is a one product business and manufactures board short for men. They operate out of rented premises in Currumbin Creek Road, where the factory is split into a manufacturing and storage area and a retail space. You, as the management accountant for the firm, have been asked to prepare CVP analysis using the following information from the previous financial year. Selling Price Less Variable Costs Direct Materials Direct Labour Variable Manufacturing Overhead Total Variable Costs Contribution Margin Contribution Margin Ratio Annual Fixed Costs Utilities Insurance Wages General Office Expenses Rent Interest Total Operating Expenses Boardshorts $ $ $ $ $ $ $ $ 75.00 14.25 21.00 2.25 37.50 37.50 50% 2,500.00 6,000.00 $ 180,000.00 $ 8,000.00 16,800.00 500.00 $ $ $ 213,800.00 Required: 1. Calculate how many pairs of board shorts High Tide needs to sell to break even. [5 marks] 2. If High Tide sold 4 000 board shorts what would this indicate about their margin of safety? [5 marks] High Tide is a one product business and manufactures board short for men. They operate out of rented premises in Currumbin Creek Road, where the factory is split into a manufacturing and storage area and a retail space. You, as the management accountant for the firm, have been asked to prepare CVP analysis using the following information from the previous financial year. Selling Price Less Variable Costs Direct Materials Direct Labour Variable Manufacturing Overhead Total Variable Costs Contribution Margin Contribution Margin Ratio Annual Fixed Costs Utilities Insurance Wages General Office Expenses Rent Interest Total Operating Expenses Boardshorts $ $ $ $ $ $ $ $ 75.00 14.25 21.00 2.25 37.50 37.50 50% 2,500.00 6,000.00 $ 180,000.00 $ 8,000.00 16,800.00 500.00 $ $ $ 213,800.00 Required: 1. Calculate how many pairs of board shorts High Tide needs to sell to break even. [5 marks] 2. If High Tide sold 4 000 board shorts what would this indicate about their margin of safety? [5 marks]

Answer rating: 100% (QA)

ANSWER 1 To calculate the number of pairs of board shorts High Tide needs to sell to break even we c... View the full answer