Clippers Inc. (CI) manufactures two types of garden clippers. A light-duty model, called the “half-inch,”is intended for clipping branches and stems up to one-half inch thick. The “one-inch” model is designedfor heavier stems and branches. To boost sales, CI decided at the beginning of the current year to reducethe price of the half-inch model to better position its price relative to some key competitors. On the otherhand, CI felt that the one-inch model was technically superior to competitors’ models and decided that asmall price increase was appropriate. The data for the current and prior year are as follows:Current Year Prior YearSales units 7,200 6,500Sales mix for each productHalf-inch model 50% 30%One-inch model 50% 70%PriceHalf-inch model $12.00 $14.00One-inch model $36.00 $32.00Variable cost per unitHalf-inch model $6.00 $6.00One-inch model $8.00 $8.00Fixed cost $35,000 $35,000Required1. Prepare a comparative contribution income statement for CI for the current year that shows the sales volume and selling price variances for each product. (Hint: Use Exhibit 16.15 as an example.)2. Determine the sales mix variance and the sales quantity variance for each product, based on contribution margin.3. Did the price change have the expected results? Why or why not?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Clippers Inc. (CI) manufactures two types of garden clippers. A light-duty model, called the “half-inch,”
is intended for clipping branches and stems up to one-half inch thick. The “one-inch” model is designed
for heavier stems and branches. To boost sales, CI decided at the beginning of the current year to reduce
the price of the half-inch model to better position its price relative to some key competitors. On the other
hand, CI felt that the one-inch model was technically superior to competitors’ models and decided that a
small price increase was appropriate. The data for the current and prior year are as follows:
Current Year Prior Year
Sales units 7,200 6,500
Sales mix for each product
Half-inch model 50% 30%
One-inch model 50% 70%
Price
Half-inch model $12.00 $14.00
One-inch model $36.00 $32.00
Variable cost per unit
Half-inch model $6.00 $6.00
One-inch model $8.00 $8.00
Fixed cost $35,000 $35,000
Required
1. Prepare a comparative contribution income statement for CI for the current year that shows the sales volume and selling price variances for each product. (Hint: Use Exhibit 16.15 as an example.)
2. Determine the sales mix variance and the sales quantity variance for each product, based on contribution margin.
3. Did the price change have the expected results? Why or why not?
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