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3 marksCost-Volume-Profit (CVP) Analysis

CAPE Accounting Unit 2 · 2017 · Paper 2 · Question 3(a)(ii)

Spencer Manufacturing produces sets of dining tables and chairs with a selling price of 250 000 per unit, variable manufacturing cost of 158 000 per unit, variable selling cost of 4% of selling price, and annual fixed manufacturing cost of $25 420 000.

Calculate the break even point in dollars ($).

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Other parts of this question

  1. 3(a)(i)Calculate the break even point in units.[6 marks]
  2. 3(b)(i)Calculate the direct material price variance.[2 marks]
  3. 3(b)(ii)Calculate the direct material quantity variance.[2 marks]
  4. 3(b)(iii)Calculate the total direct material cost variance.[2 marks]
  5. 3(b)(iv)Calculate the direct labour rate variance.[2 marks]
  6. 3(b)(v)Calculate the direct labour efficiency variance.[2 marks]
  7. 3(b)(vi)Calculate the total direct labour cost variance.[2 marks]
  8. 3(c)Outline FIVE roles of a budget committee.[5 marks]
  9. 3(d)(i)Compute the net present value (NPV) of this investment.[7 marks]
  10. 3(d)(ii)Based on the NPV, state whether you would recommend that the machine be purchased and why.[2 marks]

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