Sleep-tite Ltd manufactures orthopaedic mattresses which have proved to be very popular in the Irish market. The management team is considering the company's operating plan for the forthcoming year and has asked for your assistance. The budgeted selling price for each mattress is € 400. The cost of each mattress is as follows: Direct labour € 60 Direct Material € 120 Variable Production Overhead € 60 Fixed Production Costs € 900,000 Fixed Selling and Distribution Costs € 1,000,000 The number of mattresses Sleep-tite Ltd must sell in order to break-even are: Question 8 Select one: a. 4545 mattresses b. 11875 mattresses c. 6250 mattresses d. 8636 mattresses

Brand: MathMaster
Rating: 4.9 (229 reviews)

229

likes

1143 views

Answer to a math question Sleep-tite Ltd manufactures orthopaedic mattresses which have proved to be very popular in the Irish market. The management team is considering the company's operating plan for the forthcoming year and has asked for your assistance. The budgeted selling price for each mattress is € 400. The cost of each mattress is as follows: Direct labour € 60 Direct Material € 120 Variable Production Overhead € 60 Fixed Production Costs € 900,000 Fixed Selling and Distribution Costs € 1,000,000 The number of mattresses Sleep-tite Ltd must sell in order to break-even are: Question 8 Select one: a. 4545 mattresses b. 11875 mattresses c. 6250 mattresses d. 8636 mattresses

$Expert avatar$

Adonis

4.4

106 Answers

To calculate the breakeven point, you need to determine the contribution margin per unit. Contribution margin per unit = Selling price per unit - Variable cost per unit Selling price per unit = €400 Variable cost per unit = Direct Labour + Direct Material + Variable Production Overhead Variable cost per unit = €60 + €120 + €60 = €240 Contribution margin per unit = €400 - €240 = €160 Now, divide the total fixed costs by the contribution margin per unit to find the breakeven point: Breakeven point (in units) = Total Fixed Costs / Contribution Margin per unit Total Fixed Costs = Fixed Production Costs + Fixed Selling and Distribution Costs Total Fixed Costs = €900,000 + €1,000,000 = €1,900,000 Breakeven point (in units) = €1,900,000 / €160 = 11875 mattresses So, the answer is option b. 11875 mattresses.

Frequently asked questions (FAQs)

What is the limit of (1/x) as x approaches infinity?

What is the measure of the interior angle of a regular hexagon?

Math question: What is the derivative of f(x) = 5x^3 - 4x^2 + 7x - 9 with respect to x?

New questions in Mathematics

If we have the sequence: 3, 6, 12, 24 Please determine the 14th term.

Solution to the equation y'' - y' - 6y = 0

2+2

Additionally, the boss asked Armando to determine how many toy sales branches he would have in the fifteenth year, knowing that the first year they started with two branches, by the second they already had 5 branches and, by the third year, they had 8 branches. From the above, determine the number of branches it will have for the fifteenth year.

You are planning to buy a car worth $20,000. Which of the two deals described below would you choose, both with a 48-month term? (NB: estimate the monthly payment of each offer). i) the dealer offers to take 10% off the price, then lend you the balance at an annual percentage rate (APR) of 9%, monthly compounding. ii) the dealer offers to lend you $20,000 (i.e., no discount) at an APR of 3%, monthly compounding.

How many different ways can a psychology student select 5 subjects from a pool of 20 subjects and assign each one to a different experiment?

A pair of die is thrown and the absolute difference of the two scores is recorded. What is the probability of the absolute difference being 4 or more?