Total Expected Cost per unit |Direct Materials: |Flash Memory | |$ 27.00 | | |Application Processor | |$ 10.75 | | |Chip for Phone Calls | |$ 14.05 | | |Gyroscope
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Yellow highlight is on test word for word CHAPTER 1 58. Which of the following is not a management function? a. Constraining (NOT) b. Planning c. Controlling d. Directing Product costs consist of b. direct materials, direct labor, and manufacturing overhead. 88. Which one of the following represents a period cost? a. The VP of Sales' salary and benefits 89. Product costs are also called c. inventoriable costs. 98. Cost of goods manufactured is
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(b) What would the monthly sales have to be to achieve a target net income of $10,000. (Fixed costs + target net income) / contribution margin ratio = required sales in dollars. Contribution margin ratio = contribution margin / sales. Contribution margin = Sales – variable expenses. $7800 – 1800 = $6,000 6000 / 7800 = 77% contribution margin ratio. ($6000 + $10,000) / 77% = $16,000/0.77 = $20,779 Based on the fixed costs provided, $20,779 in monthly sales would
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First in Show Pet Foods, Inc. Case Summary Key Issues/Background: First in Show Pet Foods, Inc. faces the daunting task of introducing a new brand of dog food to the Boston area, and then the rest of the nation. This is a difficult challenge, not only because the brand, Show Circuit is unknown, but also because this dog food is frozen, unlike nearly all other dog food, which is either bagged as dry or canned. This packaging difference affects First in Show because their food will be stocked
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strength of its brand equity, the strong demand for its products and its helpful salesforce. The company also used selective distribution policy which meant less competition among distributors and thus this policy preserved the distributors’ profit margins. Question 3: There are several possibilities here. The important ones (not counting no response) are: • Spend more resources in educating customers about the benefits of bubbles • Launch uncoated bubbles • Cut prices of the products
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60 for every pound of meat it sells given an average daily sales level of 500 pounds. It charges $3.89 per pound of top-grade ground beef. The variable cost per pound is $2.99. What is the contribution margin per pound of ground beef sold? A. $0.30 B. $0.60 C. $0.90 D. $2.99 E. $3.89 Contribution margin = $3.89 - $2.99 = $.90 2. A project has an accounting break-even point of 2,000 units. The fixed costs are $4,200 and the depreciation expense is $400. The projected variable cost per unit
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| Profit | 2,590,000 | 290,000 | 540,000 | 1,760,000 | | | | | | | | | | | A. BEP =Fixed cost/ contribution margin = 4,770,000 / 3.43 = 1,390,670.50 B. What level of operation must be achieved to pay extra dividend, ignoring union demands? Target profit = 2,740,000 = [ Profit + 150,000 (additional Dividends)] Target Profits in Units: =Fixed Cost +Target Profit/ Contribution Margin =4,770,000 + 2,740,000 / 3.43 = 2,189504.30 C. What level of operations must be achieved to meet
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The Fraley Company, a merchandising firm, has planned the following sales for the next four months: March April May June Total budgeted sales $50,000 $70,000 $90,000 $60,000 Sales are made 40% for cash and 60% on account. From experience, the company has learned that a month’s sales on account are collected according to the following pattern: Month of sale 70% First month following month of sale 20% Second month following month of sale 8% Uncollectible 2% The company
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Discuss budgetary items that raise concern in the budget planning A master budget is the central planning tool for a company; it should include the following areas: * Direct Labor Budget * Direct/Raw Materials Budget * Finished Goods Budget * Manufacturing Overhead Budget * Production Budget * Sales Budget * Selling and Administrative Expense Budget Competition Bikes’ budget is subdivided into smaller budgets. The objective of the master budget is to provide a forecast
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for all models. Due to the high price elasticity index of carts, annual cart sales are estimated to drop to 39,500 carts, down from 60,000 carts sold in 2007. The increase in sales price exceeds the increase in variable costs, increasing the contribution margin. Operating leverage is increased to 5.56, however due to the decreased sales volume, total operating income falls $229,231 to $250,669. This strategy is recommended only if sales volume can be sustained or increased. Increased operating leverage
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