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Problem - Your friend Jeff just started his new business manufacturing and selling camping survival kits. For Jeff this was a life-long dream. Jeff expects to produce and sell 500 units next month. You, the management accounting guru has assembled the following Data on costs involved in the process below:
Sales Price
15
Variable Manufacturing Costs
3
Fixed Manufacturing Costs
4,000
Variable Selling Costs
0.5
Fixed Selling Costs
500
Jeff needs your help in
1. Calculating the contribution margin (Per Unit & in Dollars).
2. Will Jeff be profitable at 500 units".
3. If Jeff decided not to produce and close down the shop, what will be his actual loss?
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It entered into the following calendar year 2013 purchases and sales transactions.
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