Wheels N Cogs is a small business that designs gear for a variety clients including those that produce lawnmower equipment. According to the financial profile, the company spends $960k each on rent and utites One of the reasons why the company is so successful is that it can produce gear at a relatively low price ($1.72/gear) and can sell them for $9.34. Based on the information conceming this company, how many gears would Wheels N Cogs need to produce for them to break even? O a 50,000 per year Ob 125,000 per year Oc 100,000 per year Oa 75.000 per year
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- Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, MT. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $28.00 per hundred square feet. A cost of $21.50 per square foot was computed by taking $430,000/20,000 hundred square feet = $21.50 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigation this question using activity-based costing. After some discussion, a simple system consisting of four activity cost pools seems to be adequate. The activity cost pools, and their activity measures appear below. Activity cost pool Activity Measure Activity for the year Cleaning carpets Square feet cleaned 2,000,000…Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, MT. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $28.00 per hundred square feet. A cost of $21.50 per square foot was computed by taking $430,000/20,000 hundred square feet = $21.50 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigation this question using activity-based costing. After some discussion, a simple system consisting of four activity cost pools seems to be adequate. The activity cost pools, and their activity measures appear below. Activity cost pool Activity Measure Activity for the year Cleaning carpets Square feet cleaned 2,000,000…Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, MT. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $28.00 per hundred square feet. A cost of $21.50 per square foot was computed by taking $430,000/20,000 hundred square feet = $21.50 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigation this question using activity-based costing. After some discussion, a simple system consisting of four activity cost pools seems to be adequate. The activity cost pools, and their activity measures appear below. Activity cost pool Activity Measure Activity for the year Cleaning carpets Square feet cleaned 2,000,000…
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- Juan Fox’ has started her own company, Foxy Jeans, which manufactures imprinted jeans. Since he just begun this operation, he rents the equipment from a local printing shop when necessary. The cost of using the equipment is P3,000. The materials used in one jean cost P200, and he can sell it at 350. Requirements: Provide for a mathematical model that will show how to maximize the profit. IF Juan sells 100 jeans, what will his total revenues, total costs, and profit? How many jeans must Juan sell to have zero profit and zero loss (break-even)?Nik is a company that manufactures running shoes. It has a fixed cost of $300,000.00. Additionally, it costs $30 to produce each pair. They are sold at $80 a pair. A.Write the cost function, C, of producing x running shoes. B.Write the revenue function, R, from the sale of x running shoes. C.Suppose Nik produces too many running shoes- more than they can sell in the stores. How would this impact profits? Is there anything the managers can do to cut their losses? D.Suppose that we can sell all of the units that we produce. How many running shoes would Nik have to produce/sell in order for the company to make a profit? E.Determine the break-even point. Describe what this means. Graph the lines with at least three points each.Having recently graduated with a visual arts degree, Zane is considering starting a new business in this field, selling exotic artwork. He believes he can sell each piece of artwork for an average price of $600. The suppliers of the artwork will be paid a commission of 25% of the price. Artwork will be packed and delivered to the customer. Zane estimates that packing and delivery costs should be about $30 per product. There will be additional expenses associated with running the store. Rent will be $5,400 per month. Utilities (which it is assumed will not vary from month to month) will be $990 per month. Insurance and other expenses will be $750 per month. He plans to pay himself and one sales assistant salaries of $10,500 per month ($7,500 for himself and $3,000 for his assistant). The tax rate is assumed by Zane to be 30%. Required: a. Based on the information how many pieces of artwork per month would Zane need to sell to break even? Show all workings. b. If Zane wanted to earn a…
- Assume that HASF furniture Inc., as described, currently purchases the chair cushions for its lawn set from an outside vendor for $15 per set. Modern Furniture’s chief operations officer wants an analysis of the comparative costs of manufacturing these cushions to determine whether bringing the manufacturing in-house would save the firm money. Additional information shows that if Modern furniture’s were to manufacture the cushions, the materials cost would be $6 and the labor cost would be $4 per set and that it would have to purchase cutting and sewing equipment, which would add $10,000 to annual fixed costs. Calculate Amount company will save if company make 10,000 cushions What amount should have been inccrued if company purchase the units what amount should have been inccrued if company produce the unitsAranguez Corporation produces a molded plastic casing, LX20A, for desktop computers. Summary data from its 2013 income statement are as follows: Revenues $ 6,000,000 Variable costs (3,600,000) Fixed costs (2,000,000) Operating income $ 400,000 Jane Dall, Aranguez’s president, is very concerned about Aranguez Corporation’s poor profitability. She asks Giselle James, production manager, and Lester Saline, controller, to see if there are ways to reduce costs. After two weeks, James returns with a proposal to reduce variable costs to 50% of revenues by reducing the costs Aranguez currently incurs for safe disposal of waste plastic. Saline is concerned that this would expose the company to potential environmental liabilities. He tells James, “We would need to estimate some of these potential environmental costs and include them in our analysis.” “You cannot do that,” James replies. “We are not violating any laws. There is some possibility that we…SWA company is trying find costs of its products. Which of the following statements is true? A cost is: a. Always an expense. b. Always an asset. c. Something quite different from either an expense or an asset. d. Can be either an expense or an asset. e. Always a liability. MS Harius is an accounting in Lata company; the company has leased a copying machine on a monthly basis which is on a fixed fee each month in addition to a charge per copy. Technical made 2,400 copies and paid a total of $162 in rent in September and in October they paid $195 for 3,500 copies Determine the total amount that would be paid for 1,800 copies. a. Some other amount not listed here b. $138 c. $144 d. $160 e. $163