Answer:
1 VARIABLE COSTING ABSORPTTION THROUGHPUT
sales 4800000 4800000 4800000
opening stock 0 0 0
produced 2940000 3320000 1260000
closing 140000 158095.24 60000
cost of sales 2800000 3161904.762 1200000
contribution 2000000 1638095.238 3600000
direct labour 1680000
fixed cost
admin 660000 660000 660000
manufacturing 380000 380000
net income 960000 978095.2381 880000
2. variable absorption throughput
breakeven $218,487 $160,976 121353.5589
3. units to be sold 145000 87640.44944 332000
Explanation:
UNIT COST 7 7.90 3
material 3 3 3
labor 4 4
fixed cost 0.90
produced units
opening 0 0 0
produced 420000 420000 420000
closing 20000 20000 20000
sold 400000 400000 400000
breakeven = fixed cost / contribution per unit
3. change in unit cost
variable absorption throughput
material 4 4 4
labour 4 4
fixed cost 0.9
unit cost 8 8.9 4
sales
opening stock
produced
closing
cost of sales
contribution 1160000 780000 1328000
direct labour 168000
fixed cost
admin 660000 660000 660000
manufacturing 380000 380000
net income 120000 120000 120000
to get the amounts for the closing stock, opening stock, produced and sold we multiply by unit cost
to get produced units we take sold stock plus closing stock less openning stock
to get the units that must be sold to make net income of 120 000
we do bottom up approach and can stop at contribution then divide it by contribution per unit.
