Management Quiz

QUESTION 4: Kai decides to add color and keep his price the same. This will increase variable costs by $0.40 per issue. What will be the new unit volume (copies per issue) required to maintain $500 profits and cover the increased fixed and variable costs?

1. For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units?

The product cost per unit under absorption costing is $15.00 and under variable costing are 10.60.

Preferred Consulting will install QuickBooks 2015 Pro software on your computer’s hard drive. Next, we will setup Cutting Edge as a sole proprietor organization that is engaged in service and product sales, so the software knows how to account for all the transactions and taxes your company may incur during the year. Then we will enter your customers, vendors, supplies, and inventory that your business uses to conduct daily operations. Every transaction your business performs will be entered using the appropriate section of QuickBooks Pro 2015, and the amounts are automatically distributed to the selected chart of accounts. The chart of accounts records every transaction that is entered and keeps running totals of revenues, expenses, equity, liabilities and inventory.

Assume that next year management wants the company to earn a minimum profit of $162,000. How many units be sold to meet this target profit figure? [3 points]

This determines the project’s outcome, usefulness, effectiveness, cost, and time it takes the project to be completed. This also determines the future outcome of the project and will be needed for an upgrade. The scope of the project will be determine and completed within six months. The resources constraints of completing the project will be determine by cost and time. The cost could be higher from the original cost for the completion of the project. The expected cost of the project will be $50,000. This will include paying the project team, cost of software, and hardware. The V.P. of operations of Riordan Manufacturing will approve any changes made to the project. The project team that will be working on this project will be the IT department within the company.

= Unit Selling Price – Unit Variable Cost = $9.00 – ($1.25 + $0.35 + $1.00) = $6.40

To estimate variable costs, Tables F and I are needed. Table F shows the cost of goods sold averages 77.1% of sales (variable cost); Table I shows an average wholesale price for the seven competing brands of about $3.16 per six pack (about one gallon).

The Kenton Company processes unprocessed milk to produce two products, Butter Cream and Condensed Milk. The following information was collected for the month of June:

(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?

The selection of a new or add-on program is contingent on budgetary requirements. How much money would have to be laid out for training of staff or does the knowledge already exist in the IT department. BAL is a small company with 400 employees. The budget that would be required to purchase a new software package could seriously outweigh the need.

The $320,000, on the other hand, is a fixed cost associated with the proposed addition.

Current funds allocated to advertising and sales promotion is 3% of net sales ($80,000,000) = $360,000

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.

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