Question: T Ltd manufactures a toy which has a variable cost of $10 and a selling price of $15 per unit. Fixed costs are budgeted at

T Ltd manufactures a toy which has a variable cost of $10 and a selling price of $15 per unit. Fixed costs are budgeted at $40 000.

Required:

Calculate the number of toys needed to be sold in order to break even. (2 marks)

What is the breakeven sales value? (3 marks)

How many toys must be sold to generate a profit of $15 000? (3 marks)

What sales revenue must be made to earn a profit of $17 000? (3 marks)

Determine the sales volume that would earn T Ltd a profit of $18 000. (3 marks)

What sales value should the firm make to earn a profit of $24 000? (3 marks)

By what percent should the firm increase its sales volume over that in (f) in order to earn a profit of $30 000 after tax? (3 marks)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Q:

Webster includes in the definition of management "judicious use of means to accomplish an end"; planning is described as "the establishment of goals, policies, and procedures for a social or economic...

Q:

Digi Tools Pty Ltd plans to launch a new type of gadget. The company provided the following information: Selling price $540 Direct materials $130 Direct labour $190 Variable overhead $60 Fixed Costs...

Q:

Leon Co. a manufacturer of office equipment had the following data for year 2020 . Sales 2400 units Selling Price $40 per unit Variable Cost $15 per unit Fixed Costs $19,500 You are required to...

Q:

Fairfield Corporation uses an actual cost system and produces a single product. Information about the product for the past year is as follows: Product X Production (units) 100,000 Sales (units)...

Q:

QUESTION 1(12 marks; 22 minutes) Poullus Limited (PL), a high-tech electronics manufacturing company, is currently operating at 70% of its maximum capacity. A new customer in Lesotho has asked PL to...

Q:

QUESTION 1 (10 marks; 18 minutes) State whether the following statements are true or false; 1.1 To perform cost-volume-profit analysis, a company must be able to separate costs into fixed and...

Q:

A cost with a flat cost line within a relevant range that shifts to another level when volume significantly changes is a(n): Multiple Choice Step-wise cost. Fixed cost. Curvilinear cost. Incremental...

Q:

Q1 a) M Ltd manufactures a single product which it sells for K9 per unit. Fixed costs are K54, 000 per month and the product has a variable cost of K6 per unit in a period when actual sales were...

Q:

Problem 1 - Nancy Company has budgeted sales of $300,000 with the following budgeted costs: Direct materials $60,000 Direct manufacturing labor 40,000 Factory overhead Variable 30,000 Fixed 50,000...

Q:

Q1. E.F. is the sole owner of Lockdown Wholesale Traders, a company which buys fruit from farmers and sells it to supermarkets. All goods are collected from farms and delivered to supermarkets on the...

Q:

1. A company has the following cost structure: Direct labor per unit P 6 Direct materials per unit P 2 Fixed manufacturing overhead P 15,000 Variable manufacturing overhead per unit P 3 Variable...

Q:

Wildcat Bill carves out a production payment for $100,000 from his working interest in a producing property in order to avoid the "net income limitation" for percentage depletion purposes,...

Q:

For the model of Exercise 12.7, test the hypothesis that 02 = 0 at the 0.05 level of significance against the alternative that 2 0.

Q:

Why is there so much focus on internal controls and section 4 0 4

Q:

Which of the following are problems with identifying users of ABC? Multiple select question. ABC means different things to different organizations. Organizations will announce the discontinuance of...

Q:

Drawing from a pool of potentially international assignees who are seen as high flyers, and as part of a more general management development process, may be more effective and prevent failure, but...

Q:

adaptability of family: this factor is crucial to the success of a foreign assignment, because if the family get homesick or they simply are unhappy in the foreign environment, this may lead to low...

Q:

emotional stability and maturity: this involves having the staying power and emotional maturity to maintain equilibrium in a foreign environment as well as being non-judgmental in relationships with...