MANAGEMENT ACCOUNTING

Management Accounting



Management Accounting

Calculate the variable cost of 1 FWB.

Variable Cost = (Material Cost + Labor Cost)

Variable Cost = (£ 17.50 + £11*7)

Variable Cost = £ 94.50

Calculate the contribution made by each FWB

Contribution Margin = Price - Variable Cost

Contribution Margin = £155 - £ 94.50

Contribution Margin = £ 60.50

What is the break-even point for FWB production?

Break Even Point = Fixed Costs / Contribution Margin

Break Even Point = £ 17500 / £ 60.50

Break Even Point = 289.25 units

Graphically illustrate the break-even calculated in iii

In the graphy drawn below, the x-axis represents the units of production, and ...