Determine the best plan using cost profit volume analysis

Assignment Help Accounting Basics
Reference no: EM133079031

Question - Foods Company currently has 200 units of sales. Each unit is priced at RM10 and the variable cost per unit is RM5. M Foods rented equipment for their production. The rent for the equipment is fixed at RM500. The management is thinking of a new plan of production. The following plans were considered.

Plan 1: Reduce the use of 1 equipment and the new rent can be lowered to RM400. This plan however will increase the variable expense to RM6 per unit.

Plan 2: Increase automation and change the equipment with a higher rent of RM600. This plan can reduce the variable expense to RM4 per unit.

Based on the above information, determine the best plan using cost profit volume analysis. Your answer should show all calculations and an explanation on the riskiness of the plans.

Reference no: EM133079031

Questions Cloud

Explain the differences between finance and accounting : Explain the differences between finance, accounting, and financial reporting structures in health care
Costs of care for treating multiple sclerosis : Describe trends in the costs of care for treating multiple sclerosis, chronic arthritis, and thyroid disease. Examine the burden of health care costs on busines
What are the parameters for autoclaving : What are the parameters for autoclaving? What is the result of autoclaving?
What is the monthly interest and the effective rate : A house and lot was offered for P87, 000 with a 10% down payment and a monthly payment of P500 per month for 25 years. What is the monthly interest and the effe
Determine the best plan using cost profit volume analysis : Question - Foods Company currently has 200 units of sales. Each unit is priced at RM10. Determine the best plan using cost profit volume analysis
How do you amputate a phantom limb : How do you amputate a phantom limb?
Market rate of substitution between good x and good y : Suppose a consumer with an income of $800 is faced with Px =$7 and Py =$2. What is the market rate of substitution between good x (horizontal axis) and good y (
Efficiency of the market economy : How do firms contribute to the efficiency of the market economy in ways that networks of independent contractors do not? Use your organization, or one with whic
Providing logistic services : The Liam and Vince cargo company is providing logistic services within the Luzon area. The company is growing and they need additional delivery trucks to meet d

Reviews

Write a Review

Accounting Basics Questions & Answers

  Kimm company has gathered the following information about

kimm company has gathered the following information about its product. direct materials each unit of product contains

  What are the journal entries at October

What are the journal entries at October 31, and the net adjustment to Leopard's inventory as determined by Physical count on October 31

  In addition to the data given previously assume that the

wendells donut shoppe is investigating the purchase of a new 33700 donut-making machine. the new machine would permit

  What total cost should be recorded for the new shares

Each share had a market value of P130 and each right had a market value of P20 on the date of issue. What total cost should be recorded for the new shares

  What amount must bernie include in his gross income

What amount must Bernie include in his gross income, Bernie is a former executive who is retired

  What is the total contribution margin

If the sales mix is maintained, what is the total contribution margin when 200,000 units are sold? What is the operating income?

  Compute the amounts and ratios as of the beginning of year

Denna Company's working capital accounts at the beginning of the year follow: Compute the following amounts and ratios as of the beginning of the year

  Prepare journal entries to record current and deferred taxes

Prepare journal entries to record current and deferred taxes. Give separate journal entries for each difference and indicate, as appropriate, the required note

  What is the gain or loss in the reclassification

On this date, the fair value of the machine is P4,900,000 and the cost of disposal is P50,000. What is the gain or loss in the reclassification in 2019

  Compute direct materials quantity variance

Compute for August the Direct materials quantity variance and Direct labor rate variance

  Make a journal entry to record the income tax expense

Excess tax depreciation will reverse equally over a four-year period, 20x2-20x5. Make a journal entry to record the income tax expense and liabilities for 20x1

  Calculate the departmental overhead rates for kettles

Calculate the departmental overhead rates for Kettle's three production lines. Round all answers to the nearest cent

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd