For a company you are given the following information about their products: ...
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Accounting
For a company you are given the following information about their products:
PRODUCT 1
PRODUCT 2
TOTAL
unit price
10
25
direct material per unit
3
5
direct materials total
3000
5000
8000
indirect production cost
3000
indirect admin cost
9000
TOTAL COST
20000
a) what's the company's profit for the period?
b) Indirect cots consists of 30%. variable cost. if sales quantity of product 1 and 2 doubles , what's the new profit?
c) After the increase in volume of product 1 and 2 , if the allocation rate for indirect production cost is based on total direct material usage and the indirect admin cost is based on number of units produced, what is the absorption cost of product 1?
d) what's the profit of one unit of product 1?
e) what's the company's break even sales level?
f) what's the company's security margin rate after they doubled their sales in question b)
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