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Calculate break even in units; cost of materials used in process 2 during the month

A company has fixed costs of \$5000. Sales for 600 units have been made. The budgeted unit details are

Selling price \$ 26
Varible cost \$19
Fixed cost \$ 2

Profit \$ 5

At what minimum price should an order for 200 additional units be accepted in order to break even.

A \$19 B \$23 C \$24 \$ 26

Q The manufacture of a product involves two processes. The costs for the processes for one month are given.

Process one Process 2

Material used \$4000
Other variable costs \$5000 \$1000
Fixed costs \$3000 nil

There were no opening or closing stocks of materials or work in progress at the beginning or end of the month. All process 1 production was passed to process 2 in the month.

What is the cost of the materials used in process 2 during the month?
A \$2000 B \$6000 C \$12000 D \$14000

Solution Preview

Question 1 - First of all you need to figure how much of the fixed costs have already been covered in this problem. The total sales is (600 x \$26 = \$15,600) and the total variable cost so far is (600 x \$19 = \$11,400). Subtracting one from the ...

Solution Summary

In a narrative format, the response explains the answers.

\$2.19