Subject | Business |

Due By (Pacific Time) | 12/21/2016 11:58 pm |

Crown Ltd sells a single product with full capacity of 80,000 units per month. The selling price per unit

is $62 and is currently operating at 60% capacity. The fixed costs of the Company amount to

$500,000 per month and its Variable and Semi-Variable Costs are given below:

Variable costs:

Material $21 per unit

Labour $17 per unit

Overheads $ 7 per unit

Semi Variable costs:

At production volume of 60,000 units $200,000 per month

At production volume of 100,000 units $280,000 per month

Required:

**(a) Calculate the total variable cost per unit.**

**(b) Calculate the total fixed cost per month.**

**(c) Calculate the break-even point in sales (units).**

**(d) Calculate the current margin of safety percentage.**

**(e) Calculate the minimum sales in units to earn a profit of $400,000 per month.**

**(f) Prepare flexible budget at 70%, 80%, 90% and 100% of capacity.**

**(g) Briefly discuss the advantages of a costing system in a manufacturing company**.

**(ALL WORKINGS REQUIRED)**

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