Recall 3 year-old Manny, at the beginning of the chapter, who has & a seizure disorder. He receives his care in a mobile van sent to his community by the….
What new break-even point in units be with the new price?
Candy Garment Co., produces a particularly casual fashion collections. Average variable unit costs are as follows (per unit cloth): Cotton Fabric with standard 1.5 metres @ Rp. 20,000 = Rp. 30,000 Accesories with standard 5 bottons @ Rp. 500 = Rp. 2,500 Labor 3 hours @ Rp. 30,000 = Rp. 100,000 Supplies 3 items @ Rp. 5,000 = Rp. 15,000 Box, packing material @ Rp. 3,000 = Rp. 3,000 Selling Commission = Rp. 30,000 Fixed overhead cost (including depreciation of office and factory building, depreciation machine of office and building, supervisor’s salary, etc) = Rp. 12,000,000 Fixed selling and administrative costs are = Rp. 8,000,000 Average Candy Garment Co., sell their product Rp. 350,000 each on average. Last year Candy Garment Co., sold 380 unit. Required: 1. What is the contribution margin per unit cloth? What is the contribution margin ratio? 2. How many clothes must be sold to break even? What is the break-even sales revenue? 3. What was Candy Garment’s operating income last year? What was the margin of safety? 4. Suppose that Candyland, Inc., raises the price to Rp. 500,000 per cloth but anticipates a sales drop to 180 clothes. What will the operating income ? What new break-even point in units be with the new price? 5. Should Candy Garment raise the price? Explain.