This problem consists of two independent mini-problems.
A. Pep Manufacturing produces Product K in batches of 4,000 gallons at $.60 per gallon. Product K can be sold without further processing for $0.80 per gallon. Product K can be processed further to yield Product G, which can be sold for $1.25 per gallon. Product G requires additional processing costs at $1,650 per batch.
Compute the incremental income from further production of one batch of Product K.
B. Parker Manufacturers produces can openers. For the first six months of 2011, the company reported the following operating results while operating at 80% of plant capacity.
Cost of goods sold
Cost of goods sold was 70% variable and 30% fixed. Operating expenses were 70% variable and 30% fixed. In September 2011, Parker Manufacturers receives a special order for 15,000 can openers at $7.50 from a foreign company. The can openers normally sell for $8.00. Acceptance of the special order would result in $5,000 of shipping costs but no increase in fixed operating expenses.
Instructions: Prepare an incremental analysis for the special order.
Peterson Company incurred the following high and low maintenance costs totals during 2011:
$432,000 at 20,000 units of activity during March and $320,000 at 12,000 units during August. Instructions: Answer parts (a) through (c) below, presenting carefully labeled supporting
calculations in all cases.
(a) Use the high-low method to compute the variable cost per unit and the total fixed cost element of the mixed cost component.
(b) Based on the above analysis, express the total maintenance cost in formula format.
(c) Compute the total maintenance cost for May when activity is 16,000 units.
Harder Company manufactures a product that sells for $50 per unit. Harder incurs a variable cost per unit of $30 and $3,400,000 in total fixed costs to produce this product. It is currently selling 200,000 units.
Instructions: Complete each of the following requirements, presenting labeled supporting computations.
(a) Compute and label the contribution margin per unit and contribution margin ratio.
(b) Using the contribution margin per unit, compute the break-even point in units.
(c) Using the contribution margin ratio, compute the break-even point in dollars.
(d) Compute the margin of safety and margin of safety ratio.
(e) Compute the number of units that must be sold in order to generate net income of $400,000 using the contribution margin per unit.
(f) Should Harder give a commission to its salesmen based on 10% of sales, if it will decrease fixed costs by $400,000 and increase sales volume 10%? Support your answer with labeled computations.
For two years, Annette Larson has been the manager of the production department of a company manufacturing toys made of plastic-coated cardboard. One of the toys is a paper doll, whose “clothes” are made of acetate, and stay on the doll with static electricity. The company’s sales were mainly to large educational institutions until last year, when the dolls were sold for the first time to a large discount retailer. The dolls were sold out immediately, and enough orders were received to keep the department at full capacity for the immediate future.
The fixed costs for the department are $50,000, with $1 per unit variable costs. A paper doll and one set of clothes sell for $3. The maximum volume is 80,000 units. With the increased volume, Ms. Larson is considering two options to improve profitability. One would reduce variable costs to $0.75, and the other would reduce fixed costs to $35,000.
Given the fact that sales are increasing, make a short (one paragraph) recommendation to Ms. Larson about which option she should choose. Support your recommendation with a calculation showing her how profitability will change with each option
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
Academic Solvers has put together a group of highly qualified writers with a wide range of expertise in the online writing community. Our goal is to become your one-stop shop for all academic and online writing needs. Take a look at our fantastic service below!
At Academic SolversEditing your research paper could prove to be difficult especially amidst the tight schedules that students have. At academicsolvers.net, we offer research paper editing services. The services include proofreading and use of online platforms such as Grammarly and Turnitin to address any concerns that may arise within the paper. Get our services and you will have satisfactory results.
Custom Research Paper
Writing a research paper could be quite hectic especially if it is your first time. Identifying the research topic, finding the references and interpreting information could pose significant challenges. However, this should not be issues of concern anymore. At academicsolvers.net, we offer solutions to research papers. We deliver plagiarism free and quality research papers that are customized to suit your needs.
Despite writing expertise and skills, you are never guaranteed of error free papers. Academic solvers’ online proofreading services leaves no mistake unaddressed. We go through your paper using a variety of online tools that help to ensure that we edit your paper and make it error free. We have collected a group of experts hence can guarantee quality proofreading services.
Cheap Research Papers
Do you have difficulties writing your research paper? Are you afraid of the cost of hiring a professional to write your research papers? Worry no more. At academicsolvers.net we address both of your problems. We are equipped with a large number of professional writers. Second, we offer our research paper writing services at cheap prices that are largely affordable. Don’t miss this chance. Order our cheap research papers today.
College assignment could be one of the biggest challenges to students especially working with tight schedules. Academicsolvers.net acts to bridge this gap existing between getting satisfactory grades and meeting deadlines. Our college assignment professionals provide students with quality, plagiarism free and confidential assignment help that helps them to achieve desired grades and outcomes.
Essays are some of the most critical elements in the academic life of a student. At academic solvers we prioritize providing quality essays. As such, our professional ensure that they address issues of grammar, structure and plagiarism to provide essays that meet the need of the client. Here, we focus on developing content that aims at addressing the subject in question through the expertise of our professional and experienced writers. Try our services and we guarantee succes.