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Accounting
this is paper 1 of 2
I did these but unsure of my answers.
Question 6 (25 marks) Helios Limited manufactures two products- tape recorders and electronic calculators and sells them nationally to wholesalers. Sales through December 31, 1993, indicate that 35,000 tape recorders and 70,000 electronic calculators were sold this year. The company has a net income goal of12%onsales. Helios Limited Income Statement for the Year Ended December 31, 1993 Tape Recorders Electronic Calculators Per Unit Total Amount In thousands Per Unit Total Amount Total Amount In thousands In thousands 525 15.00 1,575 22.50 2,100 Sales Less Manufacturing Costs: Direct Materials 140 Direct Labour 70 Variable Overhead Fixed Overhead 35 315 4.50 3.00 455 4.00 2.00 2.00 1.00 210 140 105 805 280 210 140 1,015 70 2.00 6.00 11.50 Gross Margin 210 Fixed Marketing, Distribution costs Operating income Income taxes at 40% Net Income 520 495 297 The company does not intend to change the price of tape recorders. However the competition among manufacturers of electronic calculators has been increasing and in order to match the
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