2. Cost and management accounting (AS Level)
A section of Accounting, 9706
Listing 10 of 903 questions
Paul owns two car wash businesses, called City Centre Car Wash and Suburban Car Wash. City Centre Car Wash has the following monthly costs: Per car $ Detergent 1.00 Electricity 0.50 Water costs 0.05 Wage costs 1.25 Per month $ Insurance of site Lease of equipment Manager’s salary Additional information: Both car wash businesses are open for 400 hours every month. The cars are washed one at a time. The average time taken to wash each car is 10 minutes. City Centre Car Wash is currently operating at 80% capacity and Suburban Car Wash at 70% capacity. REQUIRED For City Centre Car Wash, calculate the following correct to two decimal places: the total number of cars washed per month the total variable operating cost per month the total operating cost per month the average cost per car wash the price to be charged per car to give a profit margin of 20% the total profit per month. Using the price calculated in –above, calculate the following for City Centre Car Wash, correct to two decimal places: the contribution per car (per unit) the break-even point in units the margin of safety, in dollars, when operating at 80% capacity the margin of safety, in dollars, if operating efficiency falls to 60% capacity the contribution/sales (C/S) ratio when operating at 80% capacity. Suburban Car Wash charges the same price as City Centre Car Wash. At that price Suburban Car Wash shows a contribution to sales (C/S) ratio of 40%. Fixed costs are $3240. REQUIRED Calculate, for Suburban Car Wash the break-even point in units and in dollars the total monthly profit when operating at 70% capacity.
9706_s11_qp_23
THEORY
2011
Paper 2, Variant 3
View
Questions Discovered
903