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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