Question 5 Suya Ltd manufactures a single product. There are no opening or closing stocks and...

 

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Question 5 Suya Ltd manufactures a single product. There are no opening or closing stocks and all the units produced are sold. The company is expecting to produce and sell 30,000 units at £114.50 each in April. Production details for the month are as follows: Direct materials: Direct material cost: Direct labour: Direct labour cost per hour: Variable overheads: 3 kg per unit £8 per kg 1.5 hours per unit £18.00 50% of direct labour costs Fixed overheads are budgeted at £5,400,000 for the year and Suya Ltd uses marginal costing. Required: (a) Calculate the unit cost and produce a schedule of the contribution and profit for the expected level of sales in April. (6 marks) (b) Calculate the breakeven point in both units and sales amount for April. (2 marks) (c) Calculate the revised selling price if Suya Ltd wish to make a profit of £1,500,000 with the expected level of sales in April (2 marks) (Total marks for question 5: 10 marks) Question 5 Suya Ltd manufactures a single product. There are no opening or closing stocks and all the units produced are sold. The company is expecting to produce and sell 30,000 units at £114.50 each in April. Production details for the month are as follows: Direct materials: Direct material cost: Direct labour: Direct labour cost per hour: Variable overheads: 3 kg per unit £8 per kg 1.5 hours per unit £18.00 50% of direct labour costs Fixed overheads are budgeted at £5,400,000 for the year and Suya Ltd uses marginal costing. Required: (a) Calculate the unit cost and produce a schedule of the contribution and profit for the expected level of sales in April. (6 marks) (b) Calculate the breakeven point in both units and sales amount for April. (2 marks) (c) Calculate the revised selling price if Suya Ltd wish to make a profit of £1,500,000 with the expected level of sales in April (2 marks) (Total marks for question 5: 10 marks)

Answer rating: 100% (QA)

a Calculation of Unit cost Direct Material cost Direct Labour c... View the full answer