To: Gary Colbert
From: Rachel Schmieding
Re: Cliff Jumper
Date: January 31, 2011
There are many aspects that Cliff Jumper needs to consider when deciding whether or not to accept Hi-Valu's proposition about making a low priced bike. Not only has the demand for bicycles flattened, but also Cliff Jumper's sales volume. Hi-Valu is proposing that Cliff jumper should make a low priced bike for their chain retail stores. Cliff Jumper believes that they are a high quality bike, and the making of this type of bike may ruin that image. However, they need added sales. On one hand, Hi-Valu believes that they will be selling about 24,000 bikes a year. On the other hand, if they choose to accept this proposal, they will be taking on added
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These amounts are assuming that there will be 24,000 units sold in year one. To find the financing costs, I found it best to look at the assumptions. Components and materials needed a two month supply, or 4,000 units. These units were then multiplied by the material costs per unit of $40. Work in process was found by taking ½ of the labor costs per unit, ½ the variable manufacturing overhead per unit and the full amount of material costs per unit totaling $55/unit. This was then multiplied by 1,000 units under assumption 5. All of the costs per unit were used except fixed manufacturing overhead to find the fixed goods amount. This totaled $70/unit and was then multiplied by 500 units (assumption 5). Receivables/ carrying costs were found by taking the price per unit sold ($95) and multiplying it by 6000 (or three months supplying, being that there will be 30 days inventory). All of these costs were then multiplied by 15% due to assumption that pre-tax costs of funds are 15%.
The one-time costs will only be for the first year, so the next year would show $100,000 more profit. The opportunity cost was
QUESTION 2: What total contribution is required to cover the new fixed costs and earn $500 profit per issue?
4- The committee and Ms Beckel decided to include a religious studies curriculum in the program. The principal approved of it. However, Ms Wright one of the community members did not. She threatened to show up at the committee meeting with the media. On the day of the meeting, Ms Wright showed up with a placard protesting the use of the bible in public schools.
1- The total unit cost = Total Variable Cost + Production Fixed Expenses + Advertising Expense + Selling and Administrative Expense = 3.23 + 1.20 + 0.30 + 0.19 = 4.92.
1. For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units?
2. What is the total cost? How much of the total cost are labor costs? Capital costs?
Second, the manufacturing order costs for non-stocked items was calculated by dividing total manufacturing order costs for non-stocked items by the number of orders for non-stocked products. Non-stocked products have additional costs associated with processing orders that went above and beyond the costs associated with a stocked product. The third step involved determining what the S"A allocation factor would be for calculating the S"A volume related costs. This allocation factor would then be applied to manufacturing COGS. The fourth and final step involved the calculation of the operating profit based on backing out volume related costs from sales revenues followed by deducting S"A and manufacturing order costs from the resulting gross margin to arrive at a operating profit.
In our second assumption, instead of using the cost of goods per cases in 1986, we try to use the percentage it counts in the total expenses which is 50.4% and to find the sales needed to break-even. The detail of the calculation is shown in the answer for questions d. The result is that 95,635, a little bit higher than the estimated sales of 90,000.
Between 1861 and 1865, the United States was in a dark period. Americans were fighting Americans, making it the deadliest war in US history. For many years before this war, tensions between the North and the South were elevating because no one wanted to compromise. Three main causes are the Dred Scott case, the Fugitive Slave Law, and the election of 1860, which divided America. As a result of the Civil War, the Congressional Reconstruction, 15th Amendment and postwar life reconstruction in the South occurred.
I have project that the first-year revenue of $20,000 and a 15% growth rate for the next two years. The complete cost of sales is projected to average 50% of gross sales, including 40% for the purchase of equipment and 10% for the purchase of additional items. Net income is projected to reach $70,000 in four three as sales increase and operations become more
Webmasters.com has developed a powerful new server that would be used for corporations’ Internet activities. It would cost $10 million at Year 0 to buy the equipment necessary to manufacture the server. The project would require net working capital at the beginning of each year in an amount equal to 10% of the year's projected sales; for example, NWC0 = 10%(Sales1). The servers would sell for $24,000 per unit, and Webmasters believes that variable costs would amount to $17,500 per unit. After Year 1, the sales price and variable costs will increase at the inflation rate of 3%. The company’s
See Table 1: Expected non-operating cash flow when the project is terminated at year 4 = 165,880$
The total amount of the costs which should be matched with Revenues for 2003 is $71,129. This is done by taking the capitalization amount shown above (217,520), dividing it by the 200,000 unit estimate, and multiplying it by the units that were sold in 2003. The calculation is shown below.
3) Using the budget Data, what was the total expected cost per unit if all manufacturing and shipping overhead (both variable and fixed) were allocate to planned production? What was the actual cost per unit of production and shipping?
9. (Ignore income taxes in this problem.) The Crawford Company is pondering an investment in a machine that
Manufacturing companies almost always incur variable expenses. A big reason why is because to make products, you need raw materials. In this case we have Fly Ash (250,000), Gypsum (250,000), Lime (300,000) and Sand (40,000). Another variable expense will be Workers Labor (100,000) and Drivers (25,000). The workers will be working varying hours depending upon the production need. During busy times they might be working overtime, while in down times they could very well be asked to not come in for a day. This is all under the assumption that they are paid hourly and not on salary. If they were salaried it would be considered a fixed cost. The same goes with the drivers. They will be delivering the products on a demand basis. More trips when the company is busy and less when production is slow.