Question

с рис. Direct Indirect Fixed Variable Product line Supervisor's salary. Depreciation on the factory's truck Wages of cleaning personnel for the factory. Plant manager's wages Metal used for the product Exercise 2 AMG, Inc. (sellscar batteries to service stations for an average of $50 each. The variable cost of each battery is $20 and monthly fixed manufacturing costs total $10,000. Other monthly fixed costs of the company total $20.000 Required: a. What is the breakeven point in batteries? 30 b. What is the margin of safety, assuming sales total $80,000? 281000 c. What is the breakeven level in batteries, assuming variable costs increase by 25% d. What is the breakeven level in batteries, assuming the selling price goes up by 10%, fixed manufacturing costs decline by 10%, and other fixed costs decline by $8000? - tải kg a c) (cao) x 25 = 50. HEROS 2010

Can you please solve both questions and show the steps of solving it

Answer 1

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Answer 1
Product line supervisor's salary	It is an indirect fixed cost.
	It is an indirect cost because it is not directly related to production.
	It is a fixed cost because salaries are always treated as fixed as it does not change with production..
Depreciation on factory's truck.	It is an indirect fixed cost.
	It is an indirect cost because it is not directly related to production.
	It is a fixed cost because depreciation is always fixed and does not change with production.
Wages of cleaning personnel for the factory	It is an indirect variable cost.
	It is an indirect cost because it is not directly related to production.
	It is a variable cost because wages are paid on hourly/weekly i.e. time basis. So the cost changes with time.
Metal used for the product.	It is an direct variable cost.
	It is an direct cost because it is directly related to production. Without metal production can't be done.
	It is a variable cost because cost depends on usages . If there is no production then there is no metal cost.

Answer 2		Note
AMG Inc.
Sell Price	50.00	A
Variable cost	20.00	B
Contribution margin per unit	30.00	C=A-B
Fixed manufacturing costs	10,000.00	D
Other Fixed costs	20,000.00	E
Total Fixed costs	30,000.00	F=D+E
Answer a
Breakeven point in batteries	1,000.00	G=F/C
(Total Fixed costs/Contribution margin per unit)
Answer b
Breakeven point in batteries	1,000.00	See G
Sell Price	50.00	See A
Breakeven sales ($)	50,000.00	H=G*A
Total sales ($)	80,000.00	I
Margin of Safety	30,000.00	J=I-H
(Total sales- Breakeven sales)
Answer c
Current Variable cost	20.00	See B
Increase by	25%	K
Increase by $	5.00	L=B*K
Revised Variable cost	25.00	M=B+L
Sell Price	50.00	See A
Revised Variable cost	25.00	See M
Revised Contribution margin per unit	25.00	N=A-M
Total Fixed costs	30,000.00	See J
Breakeven point in batteries	1,200.00	O=J/N
(Total Fixed costs/Contribution margin per unit)
Answer d
Current Sell price	50.00	See A
Increase by	10%	P
Increase by $	5.00	Q=A*P
Revised Sell price	55.00	R=A+Q
Current Fixed manufacturing costs	10,000.00	See D
Decrease by	10%	S
Decrease by $	1,000.00	T=D*S
Revised Fixed manufacturing costs	9,000.00	U=D-T
Current Other Fixed costs	20,000.00	See E
Decrease by	8,000.00	V
Revised Other Fixed costs	12,000.00	W=E-V
Revised Fixed manufacturing costs	9,000.00	See U
Revised Other Fixed costs	12,000.00	See W
Revised Total Fixed costs	21,000.00	X=U+W
Revised Sell Price	55.00	See R
Variable cost	20.00	See B
Revised Contribution margin per unit	35.00	Y=R-B
Breakeven point in batteries	600.00	Z=X/Y
(Revised Total Fixed costs/Contribution margin per unit)