(2) Ice Cold Ltd has a current breakeven point of 50,000 units. Which of the following would result in an increase to the breakeven point? 

a. a decrease in the variable costs per unit 

b. a decrease in the contribution margin per unit 

c. an increase in the selling price per unit 

d. a decrease in the fixed costs 

 

(3) So Hot Ltd has 5,000 units in inventory that cost $1.50 per unit to produce. Due to changing technology, the sales department is having difficulty selling the product. It will cost $2,000 to scrap the units. What is the minimum price for which So Hot should sell these units? 

 

(4) Bella Boutique Ltd has fixed costs of $1,000,000 and variable costs are 50% of the selling price. To realise profits of $250,000 from sales of 125,000 units, what must the selling price be per unit? 

 

(5) Unearthed Company makes small widgets. The manufacturing costs per unit to produce a widget are as follows: 

Direct Materials $200 

Direct Labour $150 

Variable Manufacturing Overhead $125 

Fixed Manufacturing Overhead $90 

Total Manufacturing Costs $565 

Variable selling costs to obtain and fill orders normally average $4 per unit when Unearthed sells widgets locally. Unearthed has recently paid $120,000 to advertise in an international magazine. Unearthed has just received an order from a British Company for 1,000 widgets for a total offering price of $450,000. The British Company will pay all shipping charges except the initial packaging costs which are expected to be $1.50 per widget. Unearthed has excess capacity. Should Unearthed Company accept this one time only special order? 

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Status NEW Posted 01 Jun 2017 05:06 AM My Price 7.00

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