Calculate breakeven in sales units and in sales value, Financial Accounting

Assignment Help:

Calculate breakeven in sales units and in sales value:

Tycoon makes and sells 600 toy cars per month.  Each toy car is sold for RM40 each.  Tycoon is currently producing at 50% of its full capacity.  At this level of output, the total costs are RM22,000 of which RM10,000 are fixed.  

Required:

(a)  Calculate the followings:

  • contribution margin per unit and ratio
  • breakeven in sales units and in sales value
  • Sales value in RM required to achieve $10,000 profit.

(b)  In achieving the $10000 profit, what is the margin of safety in RM value and ratio.

(c)  If Tycoon were to operate at full capacity, calculate the followings:

(i)   number of units produced that will be sold.

(ii)  total profit to be earned

(d) Prepare profit statement using marginal costing based on the current level of production and based on maximum capacity.

Question 2

The following trial balance has been extracted from the accounting records of Timmer Furniture for the year ended 31 October 2010:

 

RM

 

RM

Capital as at 1 November 2009

 

 

89,840

Motor vehicle - at cost

45,600

 

 

Office equipment - at cost

60,000

 

 

Provision for depreciation  -   motor vehicle

 

 

19,000

                                           -   office equipment

 

 

15,750

Purchases and Sales

295,320

 

479,740

Accounts receivable and payable

57,540

 

43,650

Discount allowed

14,590

 

 

Return outwards

 

 

12,480

Carriage outwards

24,540

 

 

Carriage inwards

3,510

 

 

Return inwards

14,650

 

 

Discount received

 

 

1,420

Rent and rate

23,750

 

 

Salaries

55,600

 

 

Electricity

11,830

 

 

Insurances

3,570

 

 

Sundry expenses

7,690

 

 

Bad debt expenses

7,650

 

 

Inventory at 1 November 2009

35,780

 

 

Bank overdraft

 

 

9,540

Provision for doubtful debts

 

 

2,320

Drawings

12,120

 

 

TOTAL

673,740

 

673740

 

The following information needs to be taken into account.

(i)     Inventory at 31 October 2010 was RM45,760.

(ii)    An insurance premium of RM2,400 covering the year to 31 December 2010 was paid on 2 January 2010.

(iii)   Salaries to be accrued amounted to RM2,500.

(iv)   Depreciate motor vehicle at 10% per annum using the straight-line method and office equipment at 20% using reducing balance method.

(v)    Debts of RM1,110 are deemed to be uncollectible.

(vi)   Provision for doubtful debts is to be adjusted to 5% of accounts receivable balance.

(vii)  During the year, Timmer took inventory worth RM1,150 from the business for his own private usage.


Related Discussions:- Calculate breakeven in sales units and in sales value

Practise.., What would be the effect on the balance sheet if adjustments (a...

What would be the effect on the balance sheet if adjustments (a) and (f) were omitted at the end of the year?k question #Minimum 100 words accepted#

Explain the theoretical impact on the risk discount rate, Question: A p...

Question: A proprietary life company issues only non-profit guaranteed growth bonds. The company invests only in equities with an expected return of 10% p.a, the risk free rate

Margin movement, A quick glance at the trend in the Operating and Net Profi...

A quick glance at the trend in the Operating and Net Profit Margin figure indicates an improvement in the margins over the 2 year period. As is evident from the graph above HAIL du

What kinds of risks does a firm, like Amazon.com face with respect to safeg...

like Amazon.com face with respect to safeguarding its assets? What types of controls do you think it already has in place to minimize these risks?

Demostrate a labour-leisure trade-off model, Much of the supply-side, fisca...

Much of the supply-side, fiscally conservative economic policies of Margaret Thatcher, Ronald Reagan, and even Mike Harris in Ontario were predicated on the belief that high income

Nature of the reports produced - financial accounting, State the Nature of ...

State the Nature of the reports produced - Financial accounting Financial accounting reports tend to be general-purpose which is, they contain financial information which would

Profits in subsidiary company-group accounts, Profits in subsidiary company...

Profits in subsidiary company The remaining profits that belong to the holding company should be split between pre-acquisition profits and post acquisition profits. The pre

Equity shareholders, Equity shareholders, potential and present, seem prima...

Equity shareholders, potential and present, seem primarily to the company's record of earnings. They are thus interested in relationships as earnings per share or EPS and dividends

Order point formula, Order Point Formula The analysis discussed above t...

Order Point Formula The analysis discussed above tends to be somewhat cumbersome when probability distributions are most complex and dependent and multi-period cases are involv

Prepare a lease amortization schedule, LessorMfg Corp. is a manufacturer of...

LessorMfg Corp. is a manufacturer of heavy equipment. On January 1, 2013, LessorMfg Corp. leases equipment to Small Company under a six-year noncancelable lease agreement. The foll

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd