QUESTION 5
( i ) The budget of Spot on Target Ltd shows a total contribution margin of $180,000.
Sales are budgeted to be $240,000.
Budgeted fixed costs amount to $150,000.
REQUIRED:
( a ) Calculate the
eak-even point.
( b ) What sales revenue would be required for the business to achieve a net profit of $60,000 (before tax)?
( c ) Given a tax rate of 30%, what sales revenue would be required to earn a net profit of $63,000 after tax?
QUESTION 6
· Nikolic Industries Ltd employs five employees in its factory. All accounts are in a single ledger. The following pay information relates to the week ended 8 June 2016.
· Each employee normally works a 40 hour week. Any hours in excess of 40 are paid as overtime at 1 1/2 times the normal hourly rate.
· Normal hourly rates are $25 per hour for the supervisor, and $18 per hour for each of the other four employees.
· The timesheet summary for the week to 8 June 2016 shows:
Employee
Details
XXXXXXXXXXHours
XXXXXXXXXXTotal
G. Boss
Supervision
40
D. Dunn
Job 222
44
L. Nolen
Job 222
25
Job 223
17
42
C. Newitt
Job 224
24
Sick leave
8
Maintenance
8
40
M. Rodd
Materials store
XXXXXXXXXX
Total XXXXXXXXXX
· Payment of sick leave was approved for C. Newitt. The company reduces the appropriate accrual/provision for any leave paid.
· PAYG tax withheld from all pays for the week totalled $800. There were no other payroll deductions.
· Any overtime premium is charged to factory overhead.
REQUIRED:
( a ) Calculate the total gross payroll and allocate direct and indirect labour costs for the week ended 8 June 2016.
( b ) Prepare general journal entries to record:
( i ) The allocation of the labour cost as direct and/or indirect.
( ii ) The gross factory payroll for the week and the payment of net pays.