Ahmad Inc. is a toy manufacturing firm and has the following information: Activity levels Total costs Sales revenue 65 units $15 600 100 units $21 200 $19 500 $30 000 a.) Calculate the break-even point in units and dollar. Explain your answer. b.) If the firm has current sales units of 85 units, calculate the margin of safety in dollar and explain your answer. c.) The firm was approached by a customer, Wayne to produce toy car and is willing to pay Ahmad Inc. $100 per unit. Explain whether the order should be accepted. Justify your answer with supporting calculation.

Ahmad Inc. is a toy manufacturing firm and has the following information: Activity levels Total costs Sales revenue 65 units $15 600 100 units $21 200 $19 500 $30 000 a.) Calculate the break-even point in units and dollar. Explain your answer. b.) If the firm has current sales units of 85 units, calculate the margin of safety in dollar and explain your answer. c.) The firm was approached by a customer, Wayne to produce toy car and is willing to pay Ahmad Inc. $100 per unit. Explain whether the order should be accepted. Justify your answer with supporting calculation.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 5CE: Refer to Cornerstone Exercise 3.4 for data on Dohini Manufacturing Companys purchasing cost and...

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