Concored manufacturing company uses an activity based costing system, sells 20,0

Question

Concored manufacturing company uses an activity based costing system, sells 20,000 units per year of Glaxo container at $ 40 each unit level activities cost $ 25 per unit, Facility costs total $ 125,000 per year additional data follow

batch size is 1,000 units at a cost of $ 2,000 per batch

product level activities consist of 500 engineering cost hours per year at $ 80 per hour

please answer All

A what is Concord's annual break even point

   B   compute Concord's expected operating income befor tax including the costs in the peceding bulleted list

   C     what is the Concored break even quantity batch size is 1,000 unit

Explanation / Answer

product level activity cost per unit =500*80/20000 = $2 per unit

let annual production level is x unit

total revenue = 40x

activity cost = 25x

FC = 125000

batch cost = 2x

engineering cost = 2x

for brk even

40x = 25x+2x+2x+125000

x = 125000/11 = $11363.63

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