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    Also Check: Q. 2. Discuss The Budgetary Control Limitations

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    chiedza Marime
    The factory currently operates at 50% capacity, producing 10,000 units. At 60% capacity it would produce 12,000 units, and at 80% capacity it would produce 16,000 units. Raw material costs increase 2% at 50% capacity and 5% at 80% capacity, while selling prices fall 2% and 5% respectively. Currently the cost per unit is $180 to produce and sell for $200 per unit. Material costs $100, labor $30, variable overhead $18, and fixed overhead $12 per unit.

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    Also Check: Q. 2. Discuss The Budgetary Control Limitations

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    chiedza Marime
    27 views1 page
    The factory currently operates at 50% capacity, producing 10,000 units. At 60% capacity it would produce 12,000 units, and at 80% capacity it would produce 16,000 units. Raw material costs increase 2% at 50% capacity and 5% at 80% capacity, while selling prices fall 2% and 5% respectively. Currently the cost per unit is $180 to produce and sell for $200 per unit. Material costs $100, labor $30, variable overhead $18, and fixed overhead $12 per unit.

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    flexible budget

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    The factory currently operates at 50% capacity, producing 10,000 units. At 60% capacity it would produce 12,000 units, and at 80% capacity it would produce 16,000 units. Raw material costs increase 2% at 50% capacity and 5% at 80% capacity, while selling prices fall 2% and 5% respectively. Currently the cost per unit is $180 to produce and sell for $200 per unit. Material costs $100, labor $30, variable overhead $18, and fixed overhead $12 per unit.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    27 views1 page

    Also Check: Q. 2. Discuss The Budgetary Control Limitations

    Uploaded by

    chiedza Marime
    The factory currently operates at 50% capacity, producing 10,000 units. At 60% capacity it would produce 12,000 units, and at 80% capacity it would produce 16,000 units. Raw material costs increase 2% at 50% capacity and 5% at 80% capacity, while selling prices fall 2% and 5% respectively. Currently the cost per unit is $180 to produce and sell for $200 per unit. Material costs $100, labor $30, variable overhead $18, and fixed overhead $12 per unit.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    A factory is currently working to 50% capacity and produces 10,000 units.

    Estimate the profits of the


    company when it works at 60% and 80% capacity and offer your critical comments.

    At 50% working raw material cost increases by 2% and selling price falls by 2%. At the 80% working raw
    material cost increases by 5% and selling price falls by 5%.

    Also Check:  Q. 2. Discuss the budgetary control limitations.

    At 50% working the product costs $180 per unit and is sold at $200 per unit.

    The unit cost of $180 is made up as follows:

    Material: 100
    Labor: 30
    Factory overhead: 30 (40% fix)
    Admn. overhead: 20 (50% fix)

    Solution

    Output: 10,000 unit 50% Output: 12,000 units 60% Output: 16,000 units
    capacity capacity capacity

    Per unit ($) Total ($) Per unit ($) Total ($) Per unit ($) To

    Sales Value 200 20,00,000 196 23,52,000 190 30

    Material Cost 100 10,00,000 102 12,24,000 105 16

    Labor Cost 30 3,00,000 30 3,60,000 30 4,

    Variable Factory
    18 1,80,000 18 2,16,000 18 2,
    Overhead

    Fixed Factory Overhead 12 1,20,000 10 1,20,000 7.50 1,

    Variable Admn.
    10 1,00,000 10 120,000 10 1,
    Overhead

    Fixed OH 10 1,00,000 8.33 1,00,000 6.25 1,

    Total Cost 180 18,00,000 178.33 21,40,000 176.25 28

    Profit 20 2,00,000 17.67 2,12,000 13.25 2,

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