Crowdly

Hint: round to whole-numbers in % (i.e. 23%).

Protect Ltd a small tailor produces face masks. The monthly fixed costs for rent, insurance, maintainance, cleaning etc. is budgeted to EUR 10509.

Protect Ltd sells its masks for EUR 25 per unit.

The variable cost per unit (material) is budgeted to EUR 12 per unit.

The expected volume of sales is: 20273 units

Required: Calculate the margin of safety.

Protect Ltd a small tailor produces face masks. The monthly fixed costs for rent, insurance, maintainance, cleaning etc. is budgeted to EUR 11144.

Protect Ltd sells its masks for EUR 23 per unit.

The variable cost per unit (material) is budgeted to EUR 16 per unit.

Management aims for a profit of EUR 7446.

Required: Calculate the required volume of activity to generate the target profit.

Hint: round to whole-numbers.

The bakery Soft&Sweet Ltd collected data relating to its electricity cost and volume of activity over the last two years and found the following:

Year 20X1: Volume of activity 10592 units; Total electricity cost in EUR: 1689

Year20X2: Volume of activity 14627 units; Total electricity cost in EUR: 3412

Expected Volume of activity for Year 20X3: 18998

Required: Calculate the expected variable cost for 20X3.

Which of the following costs are typically variable?

Raw material

Salaries

Merchandise/Goods for trade

Commissions

Depreciation

Rent

Mark the correct statements.

Stepped fixed cost is a special type of variable cost.

Fixed cost may vary from period to period.

Fixed cost is independent to the level of activity.

Semi-fixed cost is a mixture of fixed and variable cost.

Variable cost varies with the level of activity.

A company needs 1410 units of material A1 to fulfill an order. The following information is available for material A1:

Quantity held in stock: 497

Historic cost: 9

Sales value: 8.2

Replacement cost: 13

Material A1 is the result of an overbuying in the past and there is no other use for this material.

What is the relevant cost for material A1 to fulfill the order? Format: 10000.00

Mark the correct answers.

Relevant costs include...

outlay costs

opportunity costs

historic costs

differential future outlay costs

committed costs

sunk costs

A company needs 1103 units of material B1 to fulfill an order. The following information is available for material B1:

Quantity held in stock: 111

Historic cost: 8

Sales value: 8.5

Replacement cost: 14

Material B1 is frequently used by the business.

What is the relevant cost for material B1 to fulfill the order? Format: 10000.00

Historic cost is always irrelevant for future decision.

True

False