# answer - Katara Enterprises distributes a single product...

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Katara Enterprises distributes a single product whose selling price is \$36 and whose variable cost is \$24 per unit. The company's monthly fixed expense is \$12,000. Required: 1. Prepare a cost-volume-profit graph for the company up to a sales level of 2,000 units. Note: The CVP graph is plotted using the three steps in the text. Step 1: Draw a line parallel to the volume axis to represent the total fixed expense (See purple line). For this company, the total fixed expense is \$12,000. Step 2: Choose some volume of sales and plot the point representing total expenses (fixed and variable) at the activity level you have selected. (Part (a) of this problem wants us to find the sales level at 2,000 units) so: Fixed expense \$12,000 Variable expense (\$2,000 units * \$2 48,000 Total expense \$60,000 2. Estimate the company's break-even point in unit sales using your cost-volume profit graph. The break-even point where the total sales revenue and the total expense lines intersect. This occurs at sales of 1,000 units. This can be verified by solving for the break-even point in unit sales, Q, using the equation method as follows: Sales = Variable expenses + Fixed expenses + Profits \$36Q = \$24Q + \$12,000 + \$0 \$12Q = \$12,000 Q = \$12,000/ \$12 per unit Q = 1,000 units 0 \$20,000 5 0 0 1, 00 00 1, 50 0 2, 00 0 \$40,000 \$60,000 \$80,000 Fixed costs \$12,000 Total costs: Variable (\$24 * 2000) + \$12,000 = \$60,000 Total sales revenue: 2,000 units * \$36 = \$72,000. Break-even point: 1,000 units

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Given: Silicon Optics has supplied the fol owing data for use in its ABC system: Overhead Costs \$350,000 Other overhead costs 200,000 Total overhead costs \$550,000 Activity Cost Pool Activity Measure (Driver) Total Activity DL support Number of DL Hours 10,000 DLHs Order processing Number of orders 500 Orders Customer support Number of customers 100 Customers Other These costs are not al ocated to products or customers These are organization-sustaining activities. Distribution of Resource Consumption Across Activity Cost Pools DL Order Customer Support Processing Support Other Total 30% 35% 25% 10% 100% Other overhead costs 25% 15% 20% 40% 100% During the year, Silicon Optics completed an order for a special optical switch for a new customer, Indus
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answer - Katara Enterprises distributes a single product...

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