Unit VI question 15 %24%24Sandhill Enterprises relies heavily on a copier machine to process its paperwork. Recently the copy clerk has not been able to processall the necessary copies within the regular work week. Management is considering updating the copier machine with a faster model.Current CopierNew ModelOriginal purchase cost523,200Accumulated depreciationEstimated operating costs (annual)7,300Useful lifeSyearsIf sold now, the current copierwould have a salvage value of $1,000, If operated for the remainder of its useful life, the currentmachine would have zero salvage value. The new machine is expected to have zero salvage value after five years.Prepare an analysis to show whether the company should retain or replace the machine. (Enter negative armounts using either a negotivesign preceding the number eg.-45 or parentheseseg. (45). Do not leave any field blank. Enter Ofor the armounts.)Net IncomeRetain MachineReplace MachineIncrease (Decrease).5.5.5.The copier machine should beeTextbook and MediaAttempts: 0 of 3 usedSubmit Answer

Total operating cost :- Current copier = 7,300 x 5 = 36,500 New model = 2,100 x 5 = 10,500

Answered: %24 %24 Sandhill Enterprises relies…

Financial & Managerial Accounting

13th Edition

ISBN:9781285866307

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter19: Cost Behavior And Cost-Volume-Profit Analysis

Section: Chapter Questions

Problem 19.3CP: Break-even analysis Somerset Inc. has finished a new video game, Snowboard Challenge. Management is...

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Break-even analysis Somerset Inc. has finished a new video game, Snowboard Challenge. Management is now considering its marketing strategies. The following information is available: Anticipated sales price per unit 80 Variable cost per unit 35 Anticipated volume 1,000,000 units Production costs 20,000,000 Anticipated advertising 15,000,000 The cost of the video game, packaging, and copying costs. Two managers, James Hamilton and Thomas Seymour, had the following discussion of ways to increase the profitability of this new offering: James: I think we need to think of some way to increase our profitability Do you have any ideas? Thomas: Well, I think the best strategy would be to become aggressive on price. James: How aggressive? Thomas: If we drop the price to 60 per unit and maintain our advertising budget at 15,000,000, I think we will generate total sales of 2.000,000 units. James: I think thats the wrong way to go. Youre giving too much up on price. Instead, I think we need to follow an aggressive advertising strategy Thomas: How aggressive? James: If we increase our advertising to a total of 25,000,000, we should be able to increase sales volume to 1,400.000 units without any change in price. Thomas: I dont think thats reasonable. Well never cover the increased advertising costs. Which strategy is best: Do nothing? Follow the advice of Thomas Seymour? Or follow James Hamiltons strategy?
Direct wages 40\\nupervision- avoidable if manufacture discontinued 10\\nFloor space occupancy 7\\nThe assemblies could be purchased for $ 6.10 each from an outside supplier. If this was done, the floor space vacated could be used for storage purposes, saving warehouse rent and transport costs of $ 18 000 per annum.\\nShould the company continue to assemble the component, or buy it from the outside supplier? (Please type answer fast).
25% in the following month(iv) The management of G & J Merchandising & More is in the process of upgrading its fleet ofmotor vehicles. During March the company expects to sell an old Toyota Corolla motorvehicle that cost $500,000 at a gain of $45,000. Accumulated depreciation on this motorvehicle at that time is expected to be $340,000. The employee will be allowed to pay adeposit equal to 60% of the selling price in March; the balance will be settled in two equalamounts in April & May of 2021.(v) An air conditioning unit, which is estimated to cost $300,000, will be purchased in February.The manager has made arrangements with the suppliers to make a cash deposit of 40%upon signing of the agreement in February. The balance will be settled in four (4) equalmonthly instalments beginning March 2021.(vi) A long-term bond purchased by G & J Merchandising & More 4 years ago, with a face valueof $500,000 will mature on January 20, 2021. In order to meet the financial…
Question 23 You are contemplating leaving your full-time employment to concentrate your ability on the marketing of a new low-energy portable heater. You have spoken to a group of manufacturers of similar product, and you have produced the following data based upon the production of 1200 heaters in the six months to December 31, 2021.                                                                                     R                                 R Unit selling price                                                                                            160 Less: Direct materials                                                 50            Direct labour                                                    30 Fixed Overheads: Admin                                                                         4.00 Rent                                                                            7.50 Rates…
Question 17 You are contemplating leaving your full-time employment to concentrate your ability on the marketing of a new low-energy portable heater. You have spoken to a group of manufacturers of similar product, and you have produced the following data based upon the production of 1200 heaters in the six months to December 31, 2021.                                                                                     R                                 R Unit selling price                                                                                            160 Less: Direct materials                                                 50            Direct labour                                                    30 Fixed Overheads: Admin                                                                         4.00 Rent                                                                            7.50 Rates…
Question 7 You are contemplating leaving your full-time employment to concentrate your ability on the marketing of a new low-energy portable heater. You have spoken to a group of manufacturers of similar product, and you have produced the following data based upon the production of 1200 heaters in the six months to December 31, 2021.                                                                                     R                                 R Unit selling price                                                                                            160 Less: Direct materials                                                 50            Direct labour                                                    30 Fixed Overheads: Admin                                                                         4.00 Rent                                                                            7.50 Rates…
Question 11 You are contemplating leaving your full-time employment to concentrate your ability on the marketing of a new low-energy portable heater. You have spoken to a group of manufacturers of similar product, and you have produced the following data based upon the production of 1200 heaters in the six months to December 31, 2021. R R Unit selling price 160 Less: Direct materials 50 Direct labour 30 Fixed Overheads: Admin 4.00 Rent 7.50 Rates…
Question 4 You are contemplating leaving your full-time employment to concentrate your ability on the marketing of a new low-energy portable heater. You have spoken to a group of manufacturers of similar product, and you have produced the following data based upon the production of 1200 heaters in the six months to December 31, 2021. R R Unit selling price 160 Less: Direct materials 50 Direct labour 30 Fixed Overheads: Admin 4.00 Rent 7.50 Rates…
Chapter 7 Problem Solution 1 Please select the correct answer and solve and explain. "Goodstone Tire Corp sells tires for $90 each. Per unit costs associated with producing and selling the tires are: Direct Materials $35 Direct Labor $10 Factory Overhead $20 The variable portion of the factory overhead is $8 per unit. A foreign company wants to purchase 1,000 tires for $65 each. Assuming Goodstone has excess capacity: 1) The incremental profit from special order will be $12,000 2) The incremental loss from the special order will be $25,000 3) The will be no incremental loss or profit from the special order
Exercise 7-40 Margin of SafetyObjective 5 Comer Company produces and sells strings of colorful indoor/outdoor lights for holiday display to retailers for $8.12 per string. The variable costs per string are as follows: Direct materials $1.87 Direct labor 1.70Variable factory overhead 0.57Variable selling expense 0.42Fixed manufacturing cost totals $245,650 per year. Administrative cost (all fixed) totals $297,606. Comer expects to sell 225,000 strings of lights next year. Required: Calculate the break-even point in units. Calculate the margin of safety in units. Calculate the margin of safety in dollars. CONCEPTUAL CONNECTION Suppose Comer actually experiences a price decrease next year, while all other costs and the number of units sold remain the same. Would this increase or decrease risk for the company? (Hint: Consider what would happen to the number of break-even units and to the margin of safety.)
6. Problem 16-11 (Algo) One of your Taiwanese suppliers has bid on a new line of molded plastic parts that is currently being assembled at your plant. The supplier has bid $0.10 per part, given a forecast you provided of 100,000 parts in year 1; 200,000 in year 2; and 300,000 in year 3. Shipping and handling of parts from the supplier’s factory is estimated at $0.01 per unit. Additional inventory handling charges should amount to $0.005 per unit. Finally, administrative costs are estimated at $20 per month. Although your plant is able to continue producing the part, the plant would need to invest in another molding machine, which would cost $10,000. Direct materials can be purchased for $0.04 per unit. Direct labor is estimated at $0.02 per unit for wages plus a 50 percent surcharge for benefits and, indirect labor is estimated at $0.010 per unit plus 50 percent benefits. Up-front engineering and design costs will amount to $30,000. Finally, management has insisted that…
Question 5 You are contemplating leaving your full-time employment to concentrate your ability on the marketing of a new low-energy portable heater. You have spoken to a group of manufacturers of similar product, and you have produced the following data based upon the production of 1200 heaters in the six months to December 31, 2021. R R Unit selling price 160 Less: Direct materials 50 Direct labour 30 Fixed Overheads: Admin 4.00 Rent 7.50 Rates…

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