Calculate the amount of each product to manufacture

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Reference no: EM133042457

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: EM133042457

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