Telcos Inc. manufacturers a single product which sells for $80.00 per unit. Per-unit costs are as...

  

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Telcos Inc. manufacturers a single product which sells for $80.00 per unit. Per-unit costs are as follows: Direct materials 28 Direct labour 12 16 4 Variable overhead Fixed overhead Normally, the company produces 200,000 units per year, and the fixed overhead cost per unit is based on this amount. Fixed selling and administrative expenses are $160,000 per year. Required (A) What is the variable cost per unit and the variable cost ratio? (B) What is the contribution margin per unit and the contribution margin ratio? (C) Describe the variable cost ratio and the contribution margin ratio. What is the relationship between these two ratios? (D) What is the breakeven point in units? (E) What is the breakeven point in sales dollars? (F) How many units must the company sell to earn operating income of $1,944,000? Telcos Inc. manufacturers a single product which sells for $80.00 per unit. Per-unit costs are as follows: Direct materials 28 Direct labour 12 16 4 Variable overhead Fixed overhead Normally, the company produces 200,000 units per year, and the fixed overhead cost per unit is based on this amount. Fixed selling and administrative expenses are $160,000 per year. Required (A) What is the variable cost per unit and the variable cost ratio? (B) What is the contribution margin per unit and the contribution margin ratio? (C) Describe the variable cost ratio and the contribution margin ratio. What is the relationship between these two ratios? (D) What is the breakeven point in units? (E) What is the breakeven point in sales dollars? (F) How many units must the company sell to earn operating income of $1,944,000?

Answer rating: 100% (QA)

A Variable cost per unit Direct materialDirect labourVariable overhead2... View the full answer