MANAGERIAL ACCOUNTING F/MGRS.
6th Edition
ISBN: 9781264100590
Author: Noreen
Publisher: RENT MCG
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Chapter 6A, Problem 6A.3E
1.
To determine
Introduction: The difference in costs between the variable alternative is used to calculate financial advantage and disadvantage.
To calculate: The reference value that M should consider while pricing IC-75
2.
To determine
Introduction: The difference in costs between the variable alternative is used to calculate financial advantage and disadvantage.
To compute: The difference value offered by IC-75 relative the competitor’s offering for 4000 hour of usage.
3.
To determine
Introduction: The difference in costs between the variable alternative is used to calculate financial advantage and disadvantage.
To compute: the economic value of IC-75 after 4000 hour life.
4.
To determine
Introduction: The difference in costs between the variable alternative is used to calculate financial advantage and disadvantage.
To compute: The possible price M should consider while setting price for IC-75
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Problem Solving.Determine for what is asked. Show your solution legibly. Improper solution will not be credited.
Consider the following cost and pricing data of ABC Corp. on its Product X:Price: P120.00.per unitProfit Contribution: P90.00 Proposed additional Cost: P3 per unit (for quality improvement)Current Profits: P2.4 millionSales: 100,000 units.
A. Assuming that average variable costs are constant at all output levels, find ABC Corp.’s total cost function before the proposed change.B. Calculate the total cost function if the quality improvement is implemented.C. Calculate ABC Corp.’s break-even output before and after the change, assuming it cannot increase its price.D. Calculate the increase in sales that would be necessary with the quality improvement to increase profits to P2.7 million
!
Required information
[The following information applies to the questions displayed below.]
UR Safe Systems installs home security systems. Two of its systems, the ICU 100 and the ICU 900, have these
characteristics:
1.
2.
Design Specifications
Video cameras
Video monitors
Motion detectors
Floodlights
Alarms
Wiring
Installation
ICU 100
2
2
4
Current profit margin
Profit margin
Target cost
2
2
1,090 feet
25 hour
The ICU 100 sells for $820 installed, and the ICU 900 sells for $1,530 installed.
ICU 100
690 feet
15 hour
Required:
1. What are the current gross profit margin percentages on both systems?
2. UR Safe's management believes that it must drop the price on the ICU 100 to $760 and on the ICU 900 to $1,400 to remain
competitive in the market. Recalculate gross profit margin percentages for both products at these price levels and then compute the
target cost needed for each product to maintain the current gross profit margin percentages.
%
%
(For all requirements, round your…
View Policies
Current Attempt in Progress
Bramble Cheese Company has developed a new cheese slicer called Slim Slicer. The company plans to sell this slicer through its online
website. Given market research, Bramble believes that it can charge $40 for the Slim Slicer, Prototypes of the Slim Slicer, however, are
costing $43. By using cheaper materials and gaining efficiencies in mass production, Bramble believes it can reduce Slim Slicer's cost
substantially. Bramble wishes to earn a return of 40% of the selling price.
(a)
Compute the target cost for the Slim Slicer.
Target cost $
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