A product has the following costs. $ Direct materials 5 Direct labour 3 Variable overheads 7 Fixed overheads are $10,000 per month. Budgeted sales per month are 400 units to allow the product to break even. Required Determine the profit mark up which needs to be added to marginal cost to allow the product to break even.
【参考答案及解析】
Breakeven point is when total contribution equals fixed costs. At breakeven point, $10,000 = 400 (price – $15) ∴ $25 = price – $15 ∴ $40 = price ∴ Profit mark up = (40 – 15) / 15 × 100% = 166%
Breakeven point is when total contribution equals fixed costs. At breakeven point, $10,000 = 400 (price – $15) ∴ $25 = price – $15 ∴ $40 = price ∴ Profit mark up = (40 – 15) / 15 × 100% = 166%