1051#
大 中
小 發表於 2023-11-18 02:19 PM (第 122 天)
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QUESTION 6
Johnny Ltd makes a single product. For the year ended 30 June 2013, the product was sold for $350 per unit. The company incurred fixed factory overheads of $1,400,000 during the year. The following information was also extracted from its books:
Variable marketing costs $36 per unit sold
Fixed marketing costs $1,260,000 per annum
Fixed administrative costs $1,960,000 per annum
Unit costs:
$
Direct materials 130
Direct labour 50
Variable factory overheads 13
Inventory, 1 January 2013 Nil
Production (units) 50,000
Sales (units) 50,000
Required:
(a) Prepare an income statement for the year ended 30 June 2013 using marginal costing. (5 marks)
(b) Calculate the unit contribution margin. (1 mark)
(c) To increase the net profit in the coming year, the marketing manager proposed cutting the selling price by 10% and spending $40,000 more on advertising. The sales volume was projected to increase by 30%. Advise, with calculations, whether the company should adopt this proposal. (5 marks)