QUESTION ONE RECOVERY, a family-owned business, manufactures its single product and sells it at K16 per unit.
The business, which currently has a monthly production capacity of 19 000 units, has orders for, and plans to sell 18 000 units in the next month.
The following information is available:
i. Monthly costs for 16 000 units are estimated at K136 000
ii. Monthly costs for 18 000 units are estimated at K148 000
iii. The company only manufactures that which has been ordered and keeps no inventory.

REQUIRED:
(A) Calculate the Variable cost per unit (2 Marks)
(B) Calculate, showing your workings, the estimated Fixed Cost (2 Marks)
(C) For the planned sales of 18000 units, draw a graphical presentation of the following cost lines in Kwacha against the number of Units. (all lines must be in the same graphical presentation) (6 marks)
i. Fixed Cost
ii. Variable Cost
iii. Total Cost
(D) Calculate the Contribution sales ratio (2 Marks)
(E) Calculate the Break-even revenue (3 Marks)
(F) Calculate the Net profit for the planned sales of 18 000 units (5 Marks)

You are the manager in charge of global operations at bankglobal – a large commercial bank that operates in a number of countries around the world. you must decide whether or not to launch a new advertising campaign in the u.s. market. your accounting department has provided the accompanying statement, which summarizes the financial impact of the advertising campaign on u.s. operations. in addition, you recently received a call from a colleague in charge of foreign operations, and she indicated that her unit would lose $8 million if the u.s. advertising campaign were launched. your goal is to maximize bankglobal’s value. should you launch the new campaign? explain. pre-advertising campaign post-advertising campaign total revenues $18,610,900 $31,980,200 variable cost tv airtime 5,750,350 8,610,400 ad development labor 1,960,580 3,102,450 total variable costs 7,710,930 11,712,850 direct fixed cost depreciation – computer equipment 1,500,000 1,500,000 total direct fixed cost 1,500,000 1,500,000 indirect fixed cost managerial salaries 8,458,100 8,458,100 office supplies 2,003,500 2,003,500 total indirect fixed cost $10,461,600 $10,461,600

Grey company holds an overdue note receivable of $800,000 plus recorded accrued interest of $64,000. the effective interest rate is 8%. as the result of a court-imposed settlement on december 31, year 3, grey agreed to the following restructuring arrangement: reduced the principal obligation to $600,000.forgave the $64,000 accrued interest.extended the maturity date to december 31, year 5.annual interest of $40,000 is to be paid to grey on december 31, year 4 and year 5. the present value of the interest and principal payments to be received by grey company discounted for two years at 8% is $585,734. grey does not elect the fair value option for reporting the debt modification. on december 31, year 3, grey would recognize a valuation allowance for impaired loans of

Financial information that is capable of making a difference in a decision is