QUESTION ONE RECOVERY, a family-owned business, manufactures its single product and sells it at K16 per unit.
The business, which currently has a monthly production capacity of 19 000 units, has orders for, and plans to sell 18 000 units in the next month.
The following information is available:
i. Monthly costs for 16 000 units are estimated at K136 000
ii. Monthly costs for 18 000 units are estimated at K148 000
iii. The company only manufactures that which has been ordered and keeps no inventory.

REQUIRED:
(A) Calculate the Variable cost per unit (2 Marks)
(B) Calculate, showing your workings, the estimated Fixed Cost (2 Marks)
(C) For the planned sales of 18000 units, draw a graphical presentation of the following cost lines in Kwacha against the number of Units. (all lines must be in the same graphical presentation) (6 marks)
i. Fixed Cost
ii. Variable Cost
iii. Total Cost
(D) Calculate the Contribution sales ratio (2 Marks)
(E) Calculate the Break-even revenue (3 Marks)
(F) Calculate the Net profit for the planned sales of 18 000 units (5 Marks)

Asmartphone manufacturing company uses social media to achieve different business objectives. match each social media activity of the company to the objective it the company achieve.

Zachary company produces commercial gardening equipment. since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. the costs and cost drivers associated with the four overhead activity cost pools follow: activities unit level batch level product level facility level cost $ 64,800 $ 27,730 $ 15,000 $ 154,000 cost driver 2,400 labor hrs. 47 setups percentage of use 11,000 units production of 780 sets of cutting shears, one of the company’s 20 products, took 240 labor hours and 7 setups and consumed 15 percent of the product-sustaining activities. required: (a) had the company used labor hours as a company wide allocation base, how much overhead would it have allocated to the cutting shears? (b) how much overhead is allocated to the cutting shears using activity-based costing? (c) compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 780 units are produced. if direct product costs are $150 and the product is priced at 30 percent above cost for what price would the product sell under each allocation system? (d) assuming that activity-based costing provides a more accurate estimate of cost, indicate whether the cutting shears would be over- or underpriced if direct labor hours are used as an allocation base. explain how over-or undercosting can affect vaulker's profitability. (e) comment on the validity of using the allocated facility-level cost in the pricing decision. should other costs be considered in a cost- plus pricing decision? if so, which ones? what costs would you include if you were trying to decide whether to accept a special order?

Solomon chemical company makes three products, b7, k6, and x9, which are joint products from the same materials. in a standard batch of 320,000 pounds of raw materials, the company generates 70,000 pounds of b7, 150,000 pounds of k6, and 100,000 pounds of x9. a standard batch costs $3,840,000 to produce. the sales prices per pound are $10, $14, and $20 for b7, k6, and x9, respectively. (a) allocate the joint product cost among the three final products using weight as the allocation base. (b) allocate the joint product cost among the three final products using market value as the allocation base. (c) allocate the joint product cost among the three final products using weight as the allocation base.