Management Costing

REVISION EXERCISE 1

Alpha manufactures and sells three products, the beta, the gamma and the delta. Relevant information is as follows.

Beta Gamma Delta

$ per unit $ per unit $ per unit

Selling price 135.00 165.00 220.00

Variable cost 73.50 58.90 146.2

Total fixed costs are $950,000

An analysis of past trading pattern indicates that the products are sold in the ratio 3:4:5

Required

Calculate the breakeven point in terms of revenue of the three products.

REVISION EXERCISE 2

PL produces and sells two products. The M sells for $7 per unit and has a total variable cost of $2.94 per unit and the N sells for $15 per unit and has a total variable cost of $4.50 per unit. The marketing department has estimated that for every five units of M sold, one unit of N will be sold. The organisation’s fixed cost total $36,000.

Required

Calculate the breakeven point for PL

REVISION EXERCISE 3.

TIM produces and sells two products, the MK and KL. The organization expects to sell 1 MK for every 2 KLs and have a monthly sales revenue of $150,000. The MK has a C/S ratio of 20% whereas the KL has a C/S ratio of 40%. Budgeted monthly fixed costs are $30,000.

(a) Required

What is the budgeted breakeven sales revenue?

To earn a total contribution of ,say, $20,000

(a) Required

What sales revenue from the standard mix for MK?

REVISION EXERCISE 4.

BA produces and sells two products. The W sells at $8 per unit and has a total variable cost of $3.80 per unit, while the R sells for $14 per unit and has a total variable cost of $3.20. For every five units of W sold six units of R are sold. BA’s fixed costs are $43,890 per period.

Budgeted sales revenue for the next period is $74,400, in the standard mix.

Required:

(a) Calculate the breakeven point in terms of revenue.

(b) Calculate the margin of safety.

REVISION EXERCISE 5.

An organization makes and sells three products, F,G and H. The products are sold in the...