Fin-X Total operation cost Total number of units Cost per unit Allocation of operation cost Units Operation cost (@ $3 per unit) Materials cost Total Cost Number of units Unit Cost 10,000 Sci-X 40,000 Total $150,000 50,000 $3 10,000 $30,000 $200,000 (10,000 * 20) $230,000 10,000 $23 40,000 $120,000 $1,000,000 (40,000 *25) $1,120,000 40,000 $28 50,000 $150,000 The cost of Fin-X per unit is $23. The cost per unit for Sci-X is $28. 3 7-22 Predetermined Overhead Rates Tappan, Inc. manufactures one product and accounts for costs using a job cost system. You have obtained the following information from the corporation’s books and records for the year ended December 31, Year 1: o Total manufacturing cost during the year was $3,000,000 based on actual direct material, actual direct labor, and applied manufacturing overhead. o Manufacturing overhead was applied to work in process at 75 percent of direct labor dollars.
I would recommend they use the ABC method. By using this method, their profit margin will change for two of the three products, namely the pumps and flow controllers. The will be making a much higher profit margin on the pumps, but will need to do something to reduce costs on the flow controllers in order to make money. There biggest expense is the handling cost
The schedule of cost of goods sold shows the cost of goods manufactured will positively affect the number cost of goods sold, reducing $40,000 labor cost eventually save $40,000 of cost of goods sold. In the income statement, we found net income is significantly affected by product sales and cost. When sales and other expenses stay the same as and cost of goods sold are reduced $40,000, net income increases from $30,750 to $55,490. In addition, we can also estimate the future expected net income for a company by calculating current actual income and probability of sales revenue increase or decrease percentage. Higher probability with a positive percentage of sales revenue will result a higher expected
1. Question: (TCO4) In a merchandising business, gross profit is equal to sales revenue minus: Your Answer: Instructor Explanation: Merchandising companies are those that buy products and resell them to the end consumer, so the cost of the product sold is usually their largest cost. Their income statement should start with revenues minus cost of goods sold equals gross profit. Points Received: 5 of 5 Comments: 2. Question: (TCO4) BMX Co. sells item XJ15 for $1,000 per unit, and has a cost of goods sold percentage of 80%.
Fantastic Manufacturing, Inc This is my strategy below for the case Fantastic Manufacturing, Inc In my opinion, setting up monthly forecasts of the company’s financial statements and monthly cash budgets is much more beneficial to manage your company. It is a useful way for you to optimize expansion plans for you company. Preparing the monthly cash budgets would help you know the trend of revenue changes during and make better decisions about the future. Also, making forecasts of the cost of sales would make you more accurately decide what products you need. To create the cash budget, you should think of as many different aspects of your company as you can.
Sales forecasts In the marketing department, sales forecasts were one of the decisions we had to make. By changing the price of our product, the computer would give us its predictions, yet they were very unrealistic. We had different strategies to calculate the sales of each product, as shown below. First we use the customer score survey to calculate next year’s estimated market share; divide our score by the total scores given by the customers in a certain segments. This will show us how much customers like our product and if our performance and size fit their preferences.
1. Identification of the Problem -Key Issues/Problems -Internal Issues * Must cut costs and gain market share * Upgrade more efficient in both cost effective and environmental performance -External Issues * Global Competition -Consumer Issues * Customer pressure for price reductions -Subsidiary Issues * There are 85 Plants in 25 countries, if new technology works well, all will need to have the old wet system gutted for more efficient workspace. 2. Situational Analysis -Relevant Factors -Reduce costs and regain market share using two options: 1. Outsource painting of motors 2.
1 - .1635 = .8365 which = 83.65% Same logic/steps for the rest of the values: 18,000 24,000 28,000 Z = (18,000-20,000)/5102 z=(24,000-20,000)/5102 z=(28,000-20,000)/5102 z = -.39 z=.78 z= 1.57 1 - .3483 = .6517 1 - .7823 = .2177 1 –.9418 = .0582 which = 65.17% which = 21.77% which = 5.82% 3. Projected Profit for management under three scenarios which are 10,000 20,000 and 30,000 units Order | 10,000 units | 20,000 units | 30,000 units | 15000 | 8*10000-11*5000 =$25000 | 8*15000=$120000 | 8*15000 = $120000 | 18000 | 8*10000-11*8000= $-8000 | 8*18000 = $144000 | 8*18000 = $144000 | 24000 | 8*10000-11*14000=
Mechanically how is your strategy different than your best strategies in 4a Strategy 6 : Inventory Management in Price Cutoffs = 10 could be improved with a small tweak on the preloaded strategy. The cutoff could be reduced from 10 to say 5-6. Why does the change in 5a work better? With the tweaked strategy 6, the reduced cut-off will ensure that the inventory be cut down quickly when the overnight volatility and order processing costs are relatively high. The bid-ask spread is also a cost to the dealer.
Case Study 1 Costco Wholesale Corporation: Mission, Business Model and Strategy Costco Wholesale Corportation (Costco) operates based on a cost-based advantage and also focuses on a market niche. A cost-based advantage involves achieving lower costs than competitors (Gamble & Thompson, 2009). Costco also focuses on the upscale customer, offering more luxurious items, such as diamonds. Costco utilizes many strategies to help achieve low costs that it can pass onto its customers. By minimizing handling of goods through the use of direct shipments form the manufacturer to the store, as well as the use of cross-docking techniques where items are shipped to a cross-dock and then distributed to stores, Costco is able to minimize handling time.