MyLab Accounting with Pearson eText -- Access Card -- for Horngren's Cost Accounting
MyLab Accounting with Pearson eText -- Access Card -- for Horngren's Cost Accounting
16th Edition
ISBN: 9780134476384
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 19, Problem 19.34P
To determine

Customer Response Time:

Customer Response Time is the time lag between the receipt of an order and actual deliver of the product to that customer.

Manufacturing Cycle Time:

Manufacturing Cycle Time s the time spent upon the conversion of raw materials or inputs to finished goods or ready to sale products. It starts after the order is received and continues until the completion of production process.

To determine: Whether the introduction of new product is beneficial for S.

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Prepare and present a computation which illustrates what price should be selected in order to maximize profits when The company is considering the launch of a new product, component TDX 489 with the following information:   Standard cost per box         Variable cost 6,20         fixed cost 1,60         Total 7,80         Market research forecast of demand   Selling price 13 12 11 10 9 Demand box 5000 6000 7200 11200 13400 The company only has enough production capacity to make 7000 boxes. However, it would be possible to purchase product TDX 489 from a subcontractor at £7.75 per box for orders up to 5000 boxes and £7 per box if the orders exceed 5000 boxes.
how can the changes  below affect Mirabel’s overall cost structure. For those changes that are controllable, make a recommendation considering the uncontrollable cost changes. Be certain to consider not only the company’s break-even point, but also the desired margin of safety. If Mirabel purchases the new equipment for $1,200,000, it will increase fixed costs by 10% but will decrease the variable cost per unit for all 3 models by 5%.  If Mirabel invests the additional $650,000 in fixed marketing expenses, sales of the Model 301 are expected to increase by 8%.  If the projection is that sales will increase by 10% in the coming year. The sales volume remains fixed but there is a 5% increase in variable expenses (materials cost) for the Model 101 and 301, and a 10% increase in variable expenses for Model 201.
Ignore income taxes and other costs not mentioned in exhibit 1 or in the question itself. Market research estimates that monthly volume could increase to 3,500 units, which is well within hoist production capacity limitations, if the price were cut from $4,350 to $3,850 per unit. assuming the cost behavior patterns implied by the data in exhibit 1 are correct, would you recommend that this action be taken? What would be the impact on monthly sales, costs, and income?

Chapter 19 Solutions

MyLab Accounting with Pearson eText -- Access Card -- for Horngren's Cost Accounting

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