Sales units Sales Selling price: $250 100,000 400 Selling price: $250(0.1)= $275 137500 Variable cost: $160 variable cost: $160 Fixed cost: 22500 Fixed cost: 22,500(0.1)= 24750 1. Compute the company’s current break-even point in units and dollars? Break even Units: Fixed expense/CMUnit 22500/90 = 250 CM: 250-160= 90 Dollars: Fixed expense/ Cm ratio 22500/.36= $62500 CM Ratio: units 90/ $250 selling price = .36 2. What is the company’s current margin of safety in Units, dollars and percentage? Margin of Safety (DOLLARS) Budgeted – break even = 100,000-62500= 37500 (Percentage) 37.500/100.000= 37.5% (Units) 37500/250= 150 3.Compute the company’s margin of safety in units assuming the proposal is accepted.
Basic flexible budgeting Centron, Inc., has the following budgeted production costs: |Direct materials |$0.40 per unit | |Direct labor |1.80 per unit | |Variable factory overhead |2.20 per unit | |Fixed factory overhead | |Supervision |$24,000 | |Maintenance |18,000 | |Other |12,000 | The company normally manufactures between 20,000 and 25,000 units each quarter. Should output exceed 25,000 units, maintenance and other fixed costs are expected to increase by $6,000 and $4,500,
| | All of the above would be classified as product costs. | Response Feedback: | Product costs include all costs related to acquiring or making a product, which include direct materials, direct labor, and manufacturing overhead. | | | | | * Question 3 1 out of 1 points | | | Given the cost formula Y = $30,000 + $5X, total cost at an activity level of 16,000 units would be: | | | | | Selected Answer: | $110,000. | Answers: | $30,000. | | $46,000.
In Chapter 3, you were introduced to three types of costs associated with a manufactured product – direct materials, direct labor, and manufacturing overhead. Explain how these costs are associated with the manufactured product. Why are some of these costs allocated to the product through costing methods such as job order costing or process costing? As part of your response, be sure to provide a specific example of a company’s manufacturing costs. Your initial post should be 200-250 words and your example should be properly cited according to APA as outlined in the Ashford Writing Center.
Cash flow per share= $3.00 Price /cash flow ratio= 8.0 8.0 x 3.00 = $24.00 $24.00 / $1.50 = 16 (P/E) 3-5 ROE $100millions (sales) x 3% (profit margin) = $30 million (Net income) Net Income/assets= ROE $30 millions/$50 millions (total assets) = 6% 6% x 2.0 (equity multiplier) = 12% (ROE) 3-6 Du Pont Analysis ROA=10% Profit margin= 2% ROE= 15% ROA x Equity Multiplier= ROE (Profit Margin) (Total asset turnover)= ROA 10/2=5 (this is the firm’s total asset turnover) 15/10=1.5 (this is the firm’s equity multiplier) 3-7 Current and Quick Ratios Current assets= $3 million Current ratio= 1.5 Quick ratio= 1.0 Current assets/ Current liability= current ratio $3million/1.5= $2 million (level of current liability) Current Assets - Current Liability= Inventory $3millions – $2 millions = $1 million (level of
1. Given the following information: Total assets $250,000 Debt (12% interest rate) $150,000 Equity $40,000 Variable costs of production $150 per unit Fixed cost of production $50,000 Units Sold 1,000 Sales price $210 per unit What happens to operating income and net income if output is increased by 10 percent? Verify your answer. Solution: The operating income: Revenues: $210 x (1,000) = $210,000 Expenses: $150 x (1,000) + $50,000 = $200,000 Operating income: $210,000 - 200,000 = $10,000 Net income: $10,000 - (.12 x 150,000) = ($8,000) With 10% increase in revenue: Revenues: $210 x (1,100) = 231,000 Expenses: $150 x (1,100) + $50,000 = $215,000 Operating income: $231,000 - $215,000 = $16,000 Net income $16,000 - (.12 x $150,000) = ($2,000) Operating income rose from $10,000 to $16,000 for a 60% increase. Net income rose from ($8,000) to ($2,000) which cut losses by $6,000.
Mile High Cycles The following are the tables used to solve the problem. Budgeted Costs | | | | | | | | | | | | | | | | | | | | | | Frame Assembly | | | | | | | Budgeted | Actual | Variance | | Steel tubing | ($3,300,000/10,000)*10,800 = $3,564,000 | | | $3,564,000 | $3,572,100 | $8,100 | U | Paint | ($25,000/10,000)*10,800 = $27,000 | | | | $27,000 | $28,187 | $1,187 | U | Labor | ($1,500,000/10,000)*10,800 = $1,620,000 | | | $1,620,000 | $1,528,050 | -$91,950 | F | Total frame | ($4,825,000/10,000)*10,800 = $5,211,000 | | | $5,211,000 | $5,128,337 | -$82,663 | F | | | | | | | | | | | | Wheel assembly | | | | | | | | | | | Parts | ($1,200,000/10,000)*10,800 = $1,296,000 | | | $1,296,000 | $1,317,600 | $21,600 | U | Rework parts | | | | | | | $0 | $25,000 | $25,000 | U | Labor | ($65,000/10,000)*10,800 = $70,200 | | | | $70,200 | $74,250 | $4,050 | U | Total wheel | ($1,265,000/10,000)*10,800 = $1,366,200 | | | $1,366,200 | $1,416,850 | $50,650 | U | | | | | | | | | | | | Final assembly | | | | | | | | | | | Parts | ($3,500,000/10,000)*10,800 = $3,780,000 | | | $3,780,000 | $3,963,600 | $183,600 | U | Rework parts | | | | | | | $0 | $45,000 | $45,000 | U | Labor | ($105,000/10,000)*10,800 = $113,400 | | | $113,400 | $116,000 | $2,600 | U | Total final assembly | ($3,605,000/10,000)*10,800 = $3,893,400 | | | $3,893,400 | $4,124,600 | $231,200 | U | | | | | | | | | | | | Overhead costs | | | | | | | | | | | Rent | $250,000 | | | | | | $250,000 | $250,000 | $0 | - | Office staff | $100,000 | | | | | | $100,000 | $100,000 | $0 | - | Depreciation | $100,000 | | | | | | $100,000 | $100,000 | $0 | - | Variable Overhead | [((2/3)*$750,000)/10,000]*10,800 = $540,000 | | |
TLC Vision has a high turnover of office staff. Economy? There is 28 percent decline of LASIK surgeries with the present recession. Sustainable financial backing? TLC Vision is a 300 million dollar vision service.
We will review several problems in the workout room. Problem 1 - Nancy Company has budgeted sales of $300,000 with the following budgeted costs: Direct materials $60,000 Direct manufacturing labor 40,000 Factory overheadVariable 30,000Fixed 50,000Selling and administrative expensesVariable 20,000Fixed 30,000Question 1: Compute the average markup percentage for setting prices as a percentage of the full cost of the product. (five points)60+40+30+50+20+30 = 230 300-230 = 70 70/230 = 30%Question 2: Compute the average markup percentage for setting prices as a percentage of the variable cost of the product. (five points)60+40+30+20 = 300-150 = 150 150/150 = 100%Question 3: Compute the average markup percentage for setting prices as a percentage of the variable manufacturing costs. (five points)60+40+30 = 130 300-130 = 170 170/130 = 131%Problem 2 - Better Food Company recently acquired an olive oil processing company that has an annual capacity of 2,000,000 liters and that processed and sold 1,400,000 liters last year at a market price of $4 per liter.
A CASE STUDY Activity-based Costing and Pricing Submitted by: Maryland Tano August 24, 2011 Requirements: 1. Using direct labor-hours as the base for assigning manufacturing overhead cost to products, do the following: a. Determine the predetermined overhead rate that will be used during the year. Data given: * Estimated manufacturing overhead cost $ 2,200,000 * Direct labor hours 50,000 hours Answer: Predetermined overhead rate = $ 2,200,000 = $ 44 per DLHs 50,000 hrs b. Determine the unit product cost of one pound of the Kenya Dark coffee and one pound of the Viet Select coffee.