Charleston Company produces a headset for kids. The following unit cost information is available: Selling price per game Variable costs per game $ 30.00 $ 18.00 90,000 units $360,000 Current annual sales Current fixed costs The sales manager proposes that for next year, Charleston should reduce the selling price by 5%, increase the quality of direct materials, and increase advertising spending to drastically increase unit sales. The manager expects the following : Proposed new price $28.50 Required increase in advertising spending New Variable costs per game 24 20,000 2$ 20.00 Increase in unit sales 40% 12 How will net income be impacted? A. Net income will increase by 2$ $ 20,000 2$ $ 29,000 9,000 B. Net income will decrease by C. Net income will increase by 11,000 D. Net income will decrease by E. None of the Above LO26 13
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- Xu Ltd currently produces and sells two types of pillows that are currently gaining market share. The two types of pillows are Latex and Feather. Below are the costs and sales details of the two types of pillows for 2019:LatexFeatherAnnual sales (in pairs)12,0008,000Selling price£30£30Variable costs per pair:Materials£12£12Labour-machining (£8/hr)£2£2-assembly (£7/hr)£2.50£2.50-packing (£6/hr)£0.30£0.30Variable overheads£0.20£0.20Annual total fixed costs are currently £150,000.For 2020 financial year, Xu Ltd intends to keep Latex pillows as it is but plans to improve Feather by using high quality materials. As a result, the company has negotiated with another supplier and the new material cost for Feather pillows is expected to be £17 a pair, with the new selling price of £45 per pair.Also, Feather pillow's Labour cost for machining will increase to £4.Also in 2020, the company intends to launch a new pillow, the Memory foam, a top of the range pillow with a selling price of…Xu Ltd currently produces and sells two types of pillows that are currently gaining market share. The two types of pillows are Latex and Feather. Below are the costs and sales details of the two types of pillows for 2019: Latex FeatherAnnual sales (in pairs) 12,000 8,000 Selling price £30 £30Variable costs per pair:Materials £12 £12 Labour-machining(£8/hr) £2 £2 -assembly(£7) £2.50 £2.50 -packing (£6/hr) £0.30 £0.30Variable overhead £0.20 £0.20 Annual total fixed costs are currently…Xu Ltd currently produces and sells two types of pillows that are currently gaining marketshare. The two types of pillows are Latex and Feather. Below are the costs and salesdetails of the two types of pillows for 2019: Latex FeatherAnnual sales (in pairs) 12,000 8,000Selling price £30 £30Variable costs per pair:Materials £12 £12Labour-machining (£8/hr) £2 £2 -assembly (£7/hr) £2.50 £2.50 -packing (£6/hr) £0.30 £0.30Variable overheads £0.20 £0.20Annual total fixed costs are currently £150,000.For 2020 financial year, Xu Ltd intends to keep Latex pillows as it is but plans to improveFeather by using high quality materials. As a result, company has negotiated withanother supplier and the new material cost for Feather pillows is expected to be £17 apair, with the new selling price of £45 per pair.Also, Feather pillow’s Labour cost for machining will increase to £4.Also in 2020, the company intends to launch a new pillow, the Memory foam, a top ofthe range pillow with a selling price of…
- Concord Company is a leading manufacturer of sunglasses. One of Concord’s products protects the eyes from ultraviolet rays. An upscale sporting goods store has contacted Concord about purchasing 17,900 pairs of these sunglasses. Concord’s unit manufacturing cost, based on a full capacity of 103,000 units, is as follows: Direct materials $6 Direct labor 5 Manufacturing overhead (60% fixed) 20 Total manufacturing costs $31 Concord also incurs selling and administrative expenses of $78,640 plus $3 per pair for sales commissions. The company has plenty of excess manufacturing capacity to use in manufacturing the sunglasses. Concord’s normal price for these sunglasses is $40 per pair. The sporting goods store has offered to pay $35 per pair. Since the special order was initiated by the sporting goods store, no sales commission will be paid.What would be the effect on Concord’s income if the special order were accepted? Concord’s income will increase by $…Ironwood Company manufactures a variety of sunglasses. Production information for its most popular line, the Clear Vista (CV), follows: Per Unit Sales price $ 38.50 Direct materials 7.00 Direct labor 4.00 Variable manufacturing overhead 3.00 Fixed manufacturing overhead 5.00 Total manufacturing cost $ 19.00 Suppose that Ironwood has been approached about producing a special order for 1,500 units of custom CV sunglasses for a new semiprofessional volleyball league. All units in the special order would be produced in the league’s signature colors with a specially designed logo emblem attached to the side of the glasses. The league has offered to pay $32.00 per unit in the special order. Additional costs for the special order total $2.00 per unit for mixing the special frame color and purchasing the emblem with the league’s logo that will be attached to the glasses.Required:1. Assume Ironwood has the idle capacity necessary to accommodate the special…Bjerg Company specializes in manufacturing a unique model of bicycle helmet. The model is well accepted by consumers, and the company has enough orders to keep the factory production at 10,000 helmets per month (80% of its full capacity). Bjerg's monthly manufacturing cost and other expense data are as follows: dm = 75,000, dl = 43,000, MO = 18,000, PC = 22,100. Compute the cost to produce one helmet.
- Part P40 is a part used in the production of air conditioners at Jackson Corporation. The following costs and data relate to the production of Part P40: Number of parts produced annually 26,000 Fixed costs $41,000 Variable costs $67,000 Total cost to produce $108,000 Jackson Corporation can purchase the part from an outside supplier for $4.50 per unit. If they purchase from the outside supplier, 50% of the fixed costs would be avoided. If Jackson Corporation buys the part, what is the most Jackson Corporation can spend per unit so that operating income is equal to $98,000? Question 23 options: $2.98 $2.19 $3.77 $1.52Ironwood Company manufactures a variety of sunglasses. Production information for its most popular line, the Clear Vista (CV), follows: Per Unit Sales price $ 51.50 Direct materials 20.00 Direct labor 10.00 Variable manufacturing overhead 6.00 Fixed manufacturing overhead 5.00 Total manufacturing cost $ 41.00 Suppose that Ironwood has been approached about producing a special order for 2,800 units of custom CV sunglasses for a new semiprofessional volleyball league. All units in the special order would be produced in the league’s signature colors with a specially designed logo emblem attached to the side of the glasses. The league has offered to pay $49.00 per unit in the special order. Additional costs for the special order total $3.00 per unit for mixing the special frame color and purchasing the emblem with the league’s logo that will be attached to the glasses. -b. Suppose Ironwood is currently operating its production facility at full capacity…Ironwood Company manufactures a variety of sunglasses. Production information for its most popular line, the Clear Vista (CV), follows: Per Unit Sales price $ 51.50 Direct materials 20.00 Direct labor 10.00 Variable manufacturing overhead 6.00 Fixed manufacturing overhead 5.00 Total manufacturing cost $ 41.00 Suppose that Ironwood has been approached about producing a special order for 2,800 units of custom CV sunglasses for a new semiprofessional volleyball league. All units in the special order would be produced in the league’s signature colors with a specially designed logo emblem attached to the side of the glasses. The league has offered to pay $49.00 per unit in the special order. Additional costs for the special order total $3.00 per unit for mixing the special frame color and purchasing the emblem with the league’s logo that will be attached to the glasses. 2-b. Suppose Ironwood is currently operating its production facility at full capacity…
- Temple, Inc. produces several models of clocks. An outside supplier has offered to produce the commercial clocks for Temple for $420 each. Temple needs 1,500 clocks annually. Temple has provided the following unit costs for its commercial clocks: Direct materials $100 Direct labor 120 Variable overhead 80 Fixed overhead (40% avoidable) 150 Question: The Net cost savings if commercial clocks are produced is ________.Bold Rapid produces a competitive brand of shoes and sells them to retailers for $225 per pair. The cost per pair is $185 based on an annual volume of 5,000 pairs. Direct labour ($75 per pair) 375,000 Direct materials ($60 per pair) 300,000 Overhead Fixed 100,000 Variable ($0.40 per direct labour dollar) 150,000 250,000 Total costs 925,000 Annual output 5,000 Cost per pair $185 Shoes kingdom, a discount footwear store, currently purchased 500 pairs of shoes from Bold Rapid. Shoes kingdom has asked to purchase 1,000 pairs of shoes under a private label, at a price of $200 per pair. The shoes would be identical to those normally sold for $225. Bold Rapid believes that if it accepts the order, Shoes kingdom will cancel its usual order of 500 pairs. These sales cannot be recouped elsewhere. It this special order is accepted, the direct labour hours for the additional 500 shoes would have to be paid…nick limited sells creme, a cream suitable for variety of first aid uses. The company commenced operations earlier this year and expects to sell 100,000 tubes of Super crème. The following Information is available: Selling price per tube 7.00Direct material cost per tube 2.10 Direct labour cost per tube 1.35Variable overhead cost per tube 0.75Total fixed costs for the year. 210,000RequiredWhat is the Break-even point (BEP) in tubes and sales revenue? 4) If the company wanted to earn a profit of UGX 46,200 for the year how many tubes of Super crème must be sold? By what percentage should expected sales revenue fall before NICK Limited starts to make a loss? State the assumptions and limitations of break-even analysis