Final Exam Cmba

The most suitable costing method Yeltin should adopt is the practical capacity in order to remove the factor of uncertain budgeted sales figure. For this approach and the practical capacity of 65000-22000 units, then the revised overhead costs come out to be $30. With the inclusion of material and labor costs, the cost of the cartridge stand at $52 and the additional royalty expense of $10 raises the overall per unit cost to $62. The selling price of the cartridge is fixed at $150. With this selling price, the gross margin is equal to $88. The gross margin percentage is equal to 59%. In comparison to the budgeted volume, the gross margin has increased by 14%. See below

1. a. The simulation indicates that 584 is the optimum stocking quantity. Daily profit at this stocking quantity is $331.4346.

10. If 12,500 units are produced, what is the total amount of fixed manufacturing cost incurred to support this level of production?

Total number of shirts produced per month is 16,000. The company works for 20 days a month.

This answer can be done in tabular form as well, with the interest on inventory appearing as a new column. If one order is placed a year, the average inventory is 1,000 kegs, worth $40,000, with annual interest charges (1.5 x 12 = 18%) of $7,200. Other interest costs are calculated in a similar fashion, adjusted for average inventory.

In the Fixed-Order Quantity Model (Q-Model), every time that the stocks reach a specific level an order is placed. Q-Model requests a constant monitoring in inventory levels. The risk of stock out only occurs during the lead time, thus the safety stock is less than in P-Model for the same service level. Reorders are placed when stocks reach (R), and the safety stock that must be reordered is:

15 + 1 + + 4 + 16 + 3 + 4 = 43 days to receive a TEU from Dong Hai Supply

You use a perpetual inventory system and value the inventory using FIFO. Prior to making adjusting year-end entries you valued the inventory at the lower-of-cost or-market. Justify why you valued the inventory at lower-of-cost or-market.

4. What inventory method is used to value inventories? Does this method reflect current cost at year-end?

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

(b) How many units will Yabba have to sell next year in order for it to achieve the same profit that it did this year?

was 7,920 units. The company has provided the following data concerning the formulas to be used in its

* Production capacity is 10,000 units a year however they hope to construct a $45 million facility with a capacity of

Days’ Sales in Inventory Dabble, Inc., has sales of $980,000 and cost of goods sold of $640,000. The firm had a beginning inventory of $36,000 and an ending inventory of $46,000. What is the length of the days’ sales in inventory? (LG3)

a. Assuming the most current operational cost levels, what sales must it generate to recoup the above investment?