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Consider the following data from a mining production department involved in dimension stone production. The...

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Accounting

Consider the following data from a mining production department involved in dimension stone production. The intention of the mine is to produce and sell its products under the following cost and income structure.

Selling price US$65/tonne

Labour cost US$11/tonne

Material cost US$24/tonne

Fixed Costs US$1,200,000

a) Calculate the contribution margin per tonne

b) Estimate the breakeven point (BEP) in tonnes and monetary value

c) Determine the variable cost at BEP

d) How many tonnes should be sold to realise a profit of US$675,000

e) How many sold tonnes make a margin of safety of 30%?

f) Estimate the percentage change noted in the selling price if the BEP increases by 45% while the fixed costs also register a decline of 10%

g) Prepare a table showing VC, TC, FC and Profit/Loss for the quantities ranging from 0 to 80,000 at spacing of 5,000 tonnes.

h) Produce a chart showing the trends of TR, TC , FC and VC and indicate the BEP on the chart

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