There is no profit. Hope this helps.
The amount of interest capitalized in 2021 for the building using the specific interest method is $360000.
The first thing to do is to calculate the average cost of borrowing which will be:
= ($3200000 × 8%) + ($6400000 × 5%) / $9,600,000
= ($256000 + $320000) / $9600000
= $576000 / $9600000
= 0.06 = 6%
The average expenditure during the year will be:
= $9600000/2.
= $4800000
The capitalized Interest will be:
= 9% × $2400000
= $216000.
Then, the capitalized Interest for the borrowing will be:
= 6% × $2400000
= $144000
The total capitalized Interest will be:
= $216000 + $144000
= $360,000
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<h2>1.<u>
Calculation of contribution margin per unit:</u></h2>
Margin per unit= Selling price per unit - Variable cost
= (340)- ( 71+41+10+17)
= 340-139
=$201
<h2><u>
2. Calculation of break even units</u></h2>
Break even = fixed cost/ Contribution by margin
= ( 619950+93600)/ 201
=3550 units