Question 04: Daisy Farms (Pvt.) Ltd is engagedin the business of producing premium quality cheese. The cheese isavailable in 2 packing sizes:
Packing | Weight | Selling Price |
| | |
Small | 100g | $3 |
Large | 250g | $5 |
The following information is available for the month ofFebruary 2017:
The variable cost of producing every10g of cheese is $0.05.
Rent of the dairy farm is $350 per month.
Electricity charges are $0.5 per unit. Small packs requires 2units of electricity while large packs needs 3 units of electricpower. Fixed line rent is $250 per month.
Fixed costs are allocated to the products on basis of theirsales price.
REQUIRED: Determine the following:
The contribution earned by each pack of cheese.
The no. of large packs to be sold in February to acquirebreakeven.
The $ sales revenue of small packs in February to acquirebreakeven.
The total contribution if 200 small packs & 131 large packsof cheese were sold in February 2017.
