Estimate the total fixed cost, Managerial Accounting

Assignment Help:

Question:

  (a) For a business annual sales are Rs 50,000 and variable expenses are Rs 35,000 and fixed expenses are Rs 25,000. The owner wants to earn at least Rs 5,000 as profit, how much he will have to sell?

  (b)  A company is venturing into a new product line and it estimates that it would sell 15,000 units during a full year at a price of Rs 10 each.  It also estimates that the total fixed cost as applicable to this product would be Rs 34,000 and variable cost of production per unit would be Rs 6.  Now the question is at least how much to sell to avoid losses.  The company also contemplates a decrease of 10 per cent in selling price because of fierce competition or an increase of 10 percent in its variable cost because of scarcity or an increase of  Rs 6,000 in fixed costs because of extra establishment. The company would like to know the impact of these likely changes on its profits for this product.


Related Discussions:- Estimate the total fixed cost

Journal Entries and T-account, h. Production orders that had cost 450,000 t...

h. Production orders that had cost 450,000 to complete according to their job cost sheets were shipped to customers during the month. These goods were sold on account at 50% above

Gather data about alternatives, Gather Data about Alternatives When pot...

Gather Data about Alternatives When potential areas of activity are specified, management must assess the potential growth rate of the activities, the capability of the company

Illustrate the concept of cost, Illustrate the concept of Cost The term...

Illustrate the concept of Cost The term cost indicates the amount of expenditure (actual or national) incurred on, or attributable to, a specified thing or thing or cost unit.

Break even assumptions, underlying assumptions of breakeven analysis and th...

underlying assumptions of breakeven analysis and the limitations of this.

Interpreting the simplex tableau- sensitivity analysis, INTERPRETING THE SI...

INTERPRETING THE SIMPLEX TABLEAU We can now see that our attention must be directed to reading, interpreting and analyzing the (simplex) results. It is erroneous, however, to a

Cost estimation and management of overhead cost, How might a company use re...

How might a company use regression results to manage overhead costs?

Decision making, Trinco Ltd (Trinidad & Tobago-T&T) has been negotiating a ...

Trinco Ltd (Trinidad & Tobago-T&T) has been negotiating a contract with a potential customer in Jamaica. Before the negotiations started the Jamaican company agreed to pay $10,000

Independence of observations, Independence of observations An important...

Independence of observations An important assumption for the simple linear regression model is the independence of errors. In many time series models, this assumption is violat

Graphical method, GRAPHICAL METHOD Graphical methods can be used in gam...

GRAPHICAL METHOD Graphical methods can be used in games with no saddle points and having pay off m X 2 or 2 X n matrix. The aim is to substitute a much simpler 2 X 2 matrix for

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