ABC systems ________. Multiple Choice will allocate costs based on the overall level of activity highlight the different levels
1 answer:
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Answer:
a. $120
b. 5,000 units
c. 7,000 units
Explanation:
Hi, your question is incomplete, I found the full question online and uploaded text and image below.
Workings and explanations :
Contribution margin per unit = Sales - Variable Cots
= $200 - $80
= $120
Break even (units) = Fixed Costs ÷ Contribution margin per unit
= $600,000 ÷ $120
= 5,000 units
Unit Sales to achieve a target profit = (Targeted Profit + Fixed Costs) ÷ Contribution margin per unit
= ($240,000 + $600,000) ÷ $120
= 7,000 units
Margin of Safety = Expected sales - Break even Sales
Note : There is no much details about the current sales level
<u>FULL DETAILS OF THE QUESTION IS AS FOLLOWS :</u>
<em>Information concerning a product produced by Ender Company appears here: Sales price per unit $ 200 Variable cost per unit $ 80 Total annual fixed manufacturing and operating costs $ 600,000</em>
