Lecture 9 Illustration Solution

Lecture 9 Illustration Solution - $65 $10 $315 $50 $200 $38...

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1 | P a g e Solution to illustration 1: Example-1 (Cost base is absorption cost ) Markup = Required profit + S&A Costs Cost Markup = $20 + ($1,100 650) = 72% $650 Example-2 (Cost base is variable cost ) Markup = Required profit + Fixed Costs Cost Markup = $20 + ($1,100 700) = 60% $700
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2 | P a g e Solution Lecture Illustration 2 Question 1 D E F Price Variable costs: Materials cost
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Unformatted text preview: $65 $10 $315 $50 $200 $38 Direct labour cost $50 $250 $150 $60 $300 $188 Contribution margin/unit $5 $15 $12 Required DLHs per unit 1 5 3 Contribution margin per DLH $5.00 $3.00 $ 4.00 Order of preference (Ranking) 1 st 3 rd 2 nd Question 2 ** With the 50,000 hours available you could produce 16,667 units of product F, but there is only demand for 15,000...
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