Solution-Calculate the amount of each product to manufacture

Calculate the amount of each product to manufacture

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Reference no: EM133031477

Question - Scarcity Enterprise makes three products, AL, BE and OM. The following information was provided in order to do a cost, volume, profit analysis.

	AL $	BE $	OM $
Selling price	180	270	240
Less Variable Expenses:
Direct materials	24	72	32
Other variable expenses	102	90	148
Total variable expenses	126	162	180
Demand (units)	500	500	500
Total fixed cost	$721,500

Required -

I. Advise management on the amount of each product to manufacture to break-even. Show all workings.

II. Calculate the amount of each product to manufacture to make a profit of $111,000 before tax. Show all workings.

III. List three assumptions of CVP.

IV. Explain the term margin of safety and state three ways in which it can be expressed.

Reference no: EM133031477

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Calculate the amount of each product to manufacture

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