Company ehf. which produces high quality headphones has been in the marketing campaign for the past...

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Accounting

Company ehf. which produces high quality headphones has been inthe marketing campaign for the past six years. To meetever-increasing competition in this market, the CEO of Company ehf.that an ad campaign is needed next year to maintain the company'smarket share. At his request, the operating accountant has compiledthe accompanying figures from the cost accounting for 2012 in orderto prepare the marketing plan for next year, ie. 2013.
It is requested:
a) What will be the estimated operating income this year,ie.
B) What is the contribution margin per unit of contribution thisyear?
C) What is the break-even point in units this year?
D) The CEO believes that in order to achieve sales targets nextyear, ISK 1 million needs to be set. more advertising than thisyear, but other costs will remain unchanged. What then does thesales revenue need to be in 2013 in order for the business to be inbalance (to break-even)?
E) What does the sales revenue need to be in 2013, e.g. this ISK1 million advertising campaign, to have the same operating profitsas expected this year?
Budget plan
KR.
Variable costs:
Direct materials
800
Direct salary
400
Instant costs
300
Variable costs. per headset
1.500
Permanent cost
Product cost
2.500.000
Cost of sales
4.000.000
Management cost
7.000.000
Permanent cost total
13.500.000
Price per head
2.500
Estimated sales revenue 2012 (20,000 pcs)
50.000.000

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3.8 Ratings (610 Votes)

a Units Per Unit Total Estimated Sales 20000 2500 50000000 Less Cost Variable Cost 20000 1500 30000000 Permanent Cost 13500000 Total Cost 43500000 Estimated Operating Income 6500000 b Per Unit Estimated Sales per See Answer

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Transcribed Image Text

Company ehf. which produces high quality headphones has been inthe marketing campaign for the past six years. To meetever-increasing competition in this market, the CEO of Company ehf.that an ad campaign is needed next year to maintain the company'smarket share. At his request, the operating accountant has compiledthe accompanying figures from the cost accounting for 2012 in orderto prepare the marketing plan for next year, ie. 2013.It is requested:a) What will be the estimated operating income this year,ie.B) What is the contribution margin per unit of contribution thisyear?C) What is the break-even point in units this year?D) The CEO believes that in order to achieve sales targets nextyear, ISK 1 million needs to be set. more advertising than thisyear, but other costs will remain unchanged. What then does thesales revenue need to be in 2013 in order for the business to be inbalance (to break-even)?E) What does the sales revenue need to be in 2013, e.g. this ISK1 million advertising campaign, to have the same operating profitsas expected this year?Budget planKR.Variable costs:Direct materials800Direct salary400Instant costs300Variable costs. per headset1.500Permanent costProduct cost2.500.000Cost of sales4.000.000Management cost7.000.000Permanent cost total13.500.000Price per head2.500Estimated sales revenue 2012 (20,000 pcs)50.000.000

Budget plan	KR.
Variable costs:
Direct materials	800
Direct salary	400
Instant costs	300
Variable costs. per headset	1.500
Permanent cost
Product cost	2.500.000
Cost of sales	4.000.000
Management cost	7.000.000
Permanent cost total	13.500.000
Price per head	2.500
Estimated sales revenue 2012 (20,000 pcs)	50.000.000