Homework answers / question archive / The following information relates to La Rouge Perfumes Ltd: Selling price per bottle   $225 Variable costs per bottle:  Direct material      $70 Direct Labour     $35 Manufacturing Overhead   $15 Selling costs    $20 Total variable costs per bottle    $140 Annual fixed costs:  Manufacturing Overhead     250,000 Selling and Administrative    250,000 Total Fixed costs            500,000 Forecast annual sales  (8500)1912500 NB: As you can't manufacture part of a unit please round your answers up

The following information relates to La Rouge Perfumes Ltd: Selling price per bottle   $225 Variable costs per bottle:  Direct material      $70 Direct Labour     $35 Manufacturing Overhead   $15 Selling costs    $20 Total variable costs per bottle    $140 Annual fixed costs:  Manufacturing Overhead     250,000 Selling and Administrative    250,000 Total Fixed costs            500,000 Forecast annual sales  (8500)1912500 NB: As you can't manufacture part of a unit please round your answers up

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The following information relates to La Rouge Perfumes Ltd:

Selling price per bottle   $225

Variable costs per bottle: 

Direct material      $70

Direct Labour     $35

Manufacturing Overhead   $15

Selling costs    $20

Total variable costs per bottle    $140

Annual fixed costs: 

Manufacturing Overhead     250,000

Selling and Administrative    250,000

Total Fixed costs            500,000

Forecast annual sales  (8500)1912500

NB: As you can't manufacture part of a unit please round your answers up.

1) Break even point in units for La Rouge Perfumes Ltd: (Enter amount only, do not use decimal points or commas) 

2) Break-even point in sales dollars for La Rouge Perfumes Ltd:(Enter amount only, do not use dollar signs, decimal points or commas)

3) How many bottles would La Rouge Perfumes have to sell in order to earn a profit of $795,000?  (Enter amount only, do not use decimal points, dollar signs or commas) 

4) What is the firm's Safety Margin? (Enter amount only, do not use dollar signs , decimal points or commas) 

5) How many bottles would La Rouge Perfumes have to sell in order to earn a profit of $795,000 after tax? Assume La Rouge Perfumes pays income tax of 30% ? (Enter amount only, do not use dollar signs, decimal points or commas) 

6) Management of La Rouge Perfumes estimates that the variable manufacturing overhead costs will increase by 10% next year. How many units will the company have to sell next year to reach break-even point? (Enter amount only, do not use dollar signs, decimal points)