Power Natural manufactures and sells energy drinks. The drinks are sold for RM 1.50 a bottle to the distributor. The company estimates costs will be as follows when producing at a volume level of 100,000 units:
|Ingredients used to make the drink||RM 36,000|
|Labor working to manufacture the drink||RM 22,000|
|Rent for the manufacturing plant||RM 7,500|
|Utilities at the manufacturing plant – (variable)||RM 2,000|
|Management salaries||RM 18,000|
|Other administrative expenses, each month||RM 29,000|
|Costs to ship the product to customers||RM 3,600|
|Supervisors at the manufacturing plant||RM 6,000|
|Sales commission expense||RM 900|
|General business insurance||RM 600|
|Advertising expense, paid monthly||RM 900|
i. Determine thetotal of variable Cost?
ii. Determine the total of fixed Cost?
iii. Determine the total cost to produce and sell 120,000 bottles of drink
iv. Determine the total of manufacturing overhead Cost?
Question 3 :
XYZ Company employs 20 individuals. Eight employees are paid $12 per hour and the rest are salaried employees paid $3,000 a month. How would total costs of employees be classified?
For January, the cost components of a picture frame include $0.35 for the glass, $0.65 for the wooden frame, and $0.80 for assembly. The assembly desk and tools cost $400. A total of 1,000 frames is expected to be produced in the coming year. What would be the total costs?
ABC TV and Appliance Store is a small company that has hired you to perform some management advisory services. The following information provided to you: Sales (2,000 televisions) $900,000; total variable cost $400,000; Store manager’s salary per year $70,000; utilities and rent costs per year $157,000; Advertising and promotion per year $15,000. What are the estimated total costs if ABC store expects to sell 3,000 units next year?
Imagine you have a company that manufactures and sales wood tables. The following information provided to you: manufacturing costs is $90 per table, consisting of 80% variable costs and 20% fixed costs. The company has surplus capacity available now. Your company policy is to add a 50% markup (profit) to variable costs.
Your company has received two order:
1. a close friend orders 10 tables. What is the lowest price per table you can give him?
2. A big school is currently expanding and has decided to furniture all new classes using the wood table. The school has order a large number of tables. What is the lowest price per table your company should give on this long-term order?
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