Imperial Woodworking Ltd manufacture specialist wood furniture and sell their products all over Saudi Arabia. The company was established three years ago in Jeddah and is performing well to date. Imperial woodworking Ltd have three main product lines; TV tables, dining table and chairs. The following financial information has been provided.

Financial Information:TV tablesdining TablesChairsSelling Price per unitSAR 1,000SAR 5,000SAR 700Direct Materials cost per 1 Kg of wood timberSAR 50SAR 50SAR 50Kg of wood timber required per unit10355Direct Labour hour costSAR 30SAR 30SAR 30Sales commission per item soldSAR 10SAR 15SAR 5Variable manufacturing overhead per unitSAR 20SAR 24SAR 18Number of labour hours per unit342Budgeted sales in units300200450Additional Information:Other costs:Production manager annual salary SAR 60,000Annual marketing costs SAR 10,000- related to TV tablesGeneral Expenses SAR 5,000Annual Fixed manufacturing overhead (excluding depreciation) SAR10,000 (20% relates to TV tables)Annual equipment depreciation SAR 10,000The company had 8 TV tables and 100 kg of wood timber in stock at the end of September.Company policy is to maintain 20% of the following months sales level as closing inventory for finished goods.Company policy to maintain 25% of next months’ production needs as closing inventory for direct materials.Budgeted sales of TV tables for the next six months are as follows:OctoberNovemberDecemberJanuaryFebruary4035202020Cash collections on sales are as follows:30% in the month of sale70% in the month following saleReceivables at the end of September were SAR 22,000Cash payments on purchases are as follows:60% in the month of purchase40% in the following monthPayables at the end of September were SAR 6,000The closing cash balance in September 2018 was SAR 40,000 and it is company policy to maintain cash at this level at the end of each month.The company have access to a 4% bank loan of SAR 70,000The company paid a dividend of SAR 40,000 in NovemberCash of SAR 50,000 was invested in the company by a private investor in December.Using the information above, calculate the following:1. Which product is performing the best?2. Calculate the overall break-even point in sales value for the company3. If the selling price of TV tables is increased to SAR 1,200 per unit, what would be the new overall profit?4. Refer to original data, what level of sales must the company achieve to make a profit of SAR 1,500,000?

Order your Assignment today and save 15% with the discount code ESSAYHELP

X