The Alset Solar Power Company produces and assembles industrial sized solar powered batteries (SPB). The current...

Transcribed Image Text:

The Alset Solar Power Company produces and assembles industrial sized solar powered batteries (SPB). The current precision is that the company will have orders to make a total of 2750 SPBs for the coming financial year. Production experience shows the following information is available: 1. Number of hours required to produce one SPB is 225 hours. 2. The average labour rate is $43 per hour. 3. The material cost per unit is $6500. 4. The direct manufacturing overhead for the 2750 SPBS is estimated at 30% of direct labour cost. 5. The total annual fixed cost is estimated to be $150,000 plus rent which is $1200 per month 6. The required profit before tax is 17%. a) Calculate the SPB per unit price. [8 marks] b) Determine the break-even quantity for the company. [8 marks] c) Calculate the per unit contribution margin. [4 marks] d) If company has to pay $165,000 in interest calculate the company's Net Profit given that in Australia the corporate tax rate is 30%. [5 marks] The Alset Solar Power Company produces and assembles industrial sized solar powered batteries (SPB). The current precision is that the company will have orders to make a total of 2750 SPBs for the coming financial year. Production experience shows the following information is available: 1. Number of hours required to produce one SPB is 225 hours. 2. The average labour rate is $43 per hour. 3. The material cost per unit is $6500. 4. The direct manufacturing overhead for the 2750 SPBS is estimated at 30% of direct labour cost. 5. The total annual fixed cost is estimated to be $150,000 plus rent which is $1200 per month 6. The required profit before tax is 17%. a) Calculate the SPB per unit price. [8 marks] b) Determine the break-even quantity for the company. [8 marks] c) Calculate the per unit contribution margin. [4 marks] d) If company has to pay $165,000 in interest calculate the company's Net Profit given that in Australia the corporate tax rate is 30%. [5 marks]

Answer rating: 100% (QA)

a SPB per unit price Direct labor cost per unit 225 hoursunit 43hour 9750 Direct manufacturing overh... View the full answer