Vernon is a xylophone manufacturer. The direct materials cost of a xylophone is 300; the direct labour
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Question:
Vernon is a xylophone manufacturer. The direct materials cost of a xylophone is €300; the direct labour process is intensive and costs €450 per xylophone. Both direct materials and direct labour are fully variable. Each xylophone sells for €1500. In August 2008 the company expects to sell 120 xylophones, and it has budgeted for fixed overheads of €54 000.
What is the company’s budgeted contribution for August 2008?
What is the company’s budgeted net profit for August 2008?
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