Pottery Analysis

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Posted by admin | Posted in Uncategorized | Posted on 01-04-2009

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pottery analysis
Help with Accounting: Cost-volume-profit analysis problem?

Potter sells various pottery goods on local markets. Its fixed costs (depreciation on the stove utilities, tools and portable stall) are $ 5,000 per year. The average price for a piece of pottery is $ 5.50, and average variable costs (such as clay, paints, glazes, etc.) $ 3.50 per piece. a) How many pieces of pottery have to sell his expenses Potter just covered? (Is that too ask to find the breakeven point? How do I do that?) B) If Potter wants to earn $ 7,000 profit, how many pieces of pottery have to sell it? Prepare a profit and answer to statement (with costing) check your. Who knows how to do this? It would be great if you guys can show me how. Thanks in Advance =)

a) 5.50 $ Price – $ 3.50 $ 2.00 cost = gross profit per unit 2.00. OH ÷ $ 5,000.00 = $ 2500 to break even. B) $ 7000.00 profit ÷ $ 2.00 = 3500. 3500 + 2500 = 6000 shares total. $ 33,000 in sales from 6000 pc @ $ 5.50 $ 21,000 cost of 6000 pc @ $ 3.50 ======= Gross profit $ 12,000 $ 5,000 $ 7,000 ======= overhead profit

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