Sisters, Inc. manufactures professional-level printers that perform multiple features, such as high-resolution color scanning, printing, faxing, and copying. The new printer model has a target price of $600. Management requires a 20% profit on new product revenues. Required: 1. Calculate the amount of desired profit. $fill in the blank 1 2. Calculate the target cost. $fill in the blank 2

Sisters, Inc. manufactures professional-level printers that perform multiple features, such as high-resolution color scanning, printing, faxing, and copying. The new printer model has a target price of $600. Management requires a 20% profit on new product revenues. Required: 1. Calculate the amount of desired profit. $fill in the blank 1 2. Calculate the target cost. $fill in the blank 2

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 10EB: Keleher Industries manufactures pet doors and sells them directly to the consumer via their web...

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Keleher Industries manufactures pet doors and sells them directly to the consumer via their web site. The marketing manager believes that if the company invests in new software, they will increase their sales by 10%. The new software will increase fixed costs by $400 per month. Prepare a forecasted contribution margin income statement for Keleher Industries reflecting the new software cost and associated increase in sales. The previous annual statement is as follows:
A Company wants to introduce new product. The estimated price of each mobile phone is RO 60. The company requires a profit margin of 20% on sales. The estimated cost of manufacturing the product is : Material cost : RO 9.500 Labour Cost : RO 12.750 Other Direct Expenses : RO 7.500 Administrative Costs : RO 5.000 Marketing and Selling expenses : RO 15.000 Calculate the Target Cost of the product and the Target Cost Gap.
On-the-Go, Inc., produces two models of traveling cases for laptop computers—the Programmer and the Executive. The bags have the following characteristics. Programmer Executive Selling price per bag $ 70 $ 100 Variable cost per bag $ 30 $ 40 Expected sales (bags) per year 8,000 12,000 The total fixed costs per year for the company are $819,000. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix is the same at the break-even point, compute the break-even point. c. If the product sales mix were to change to nine Programmer-style bags for each Executive-style bag, what would be the new break-even volume for On-the-Go?
FlashCo. Manufactures 1 GB flash drives (jump drives). Price and cost data for a relevant range extending to 200,000 units per month are as follows: (Click the icon to view the data.) Requirements Ignore requirements 2, 3, 9 & 10 Requirement 1. What is the company's contribution margin per unit? The contribution margin per unit is $3. What is the company's contribution margin ratio? The contribution margin ratio is 15%. What is the company's total contribution margin? The total contribution margin is $. Requirement 4. What is the breakeven point in units? The company's breakeven point is units. What is the breakeven point in sales dollars? The breakeven point in dollars is $ Requirement 5. How many units would the company have to sell to earn a target monthly profit of $260,100? In order to earn a monthly profit of $260,100, the company must sell units. C Requirement 7. Return to the original data for this question and the rest of the questions. What is the company's current operating…
Gotcha Covered manufactures and sells leather cases for cell phones. Each case sells for $80. Variable manufacturing costs are $30 per case. We pay a sales commission of 10% of the selling price to our salespeople. Fixed manufacturing costs are $200,000 and fixed operating costs are $35,000. Calculate the following amounts: a. b. C. ii. iii. iv. V. Target quantity if we want to generate Operating Income = $100,000 Neatly draw a CVP Chart. Be sure to label everything relevant. We currently produce and sell 10,000 cases. i. What is our expected Operating Income? How much is our Margin of Safety in units and dollars? Prepare an Income Statement (through Oper Inc) using the GM format. Prepare an Income Statement (through Oper Inc) using the CM format. Our plant manager suggested we purchase a new machine which will lower our labor costs. This change will increase Fixed Costs by $30,000 and reduce Variable Cost per Unit by $5. Calculate the new Breakeven Quantity and new expected Operating…
Star Company's manager, Tom, is thinking about production of a new product. Tom is considering three different products. Tom would like to select a product with highest profit. Following table contains the expected selling price and costs for each product: Selling price per unit Cost: Direct material coast per unit Direct labor cost per unit Variable overhead cost per unit Total Fixed costs A $20.90 Annual Demand in units 300,000 450,000 600,000 750,000 $5 $6 $1.4 $500,000 Tom expects the same demand for all three products. Products B $30 $8 $7 $2.5 $900,000 Probability 45% 30% 15% 10% с $28.50 Step 1: Identify a choice criterion. Step 2: Identify the set of alternative actions that can be taken. Step 3: Identify the set of events that can occur. Step 4: Assign a probability to each event that can occur. Step 5: Identify the set of possible outcomes. Calculate the expected value for each option. $4 $5.5 $9 $1,000,000 Require: Review Chapter 3 Appendix in text book, the PP slides and…
International Printer Machines (IPM) builds three computer printer models: Alpha, Beta, andGamma. Information for these three products is as follows: Alpha Beta Gamma Total Selling price per unit $250 $400 $1 500 Variable cost per unit $80 $200 $800 Expected unit sales (annual) 12,000 6,000 2,000 20,000 Sales mix 50 percent 40 percent 10 percent 100 percent Total annual fixed costs are $5,000,000. Assume the sales mix remains the same at all levelsof sales.Required:a) Calculate the weighted average unit contribution margin, assuming a constant sales mix.b) How many units of each printer must be sold to break even? c) i) Explain what is the margin of safety ii) Calculate in sales units the margin of safety for IPM, assuming projected sales are 25,000 units? SHOW YOUR WORKING
Vista Company manufactures electronic equipment. It currently purchases the special switches used in each of its products from an outside supplier. The supplier charges Vista $5.20 per switch. Vista 's CEO is considering purchasing either machine A or machine B so the company can manufacture its own switches. The projected data are as follows: Machine A Machine B Annual fixed costs $ 582, 450 $ 792, 100 Variable cost per switch 1.67 0.75 Required: 1. For each machine, what is the minimum number of switches that Vista must make annually for total costs to equal outside purchase cost? 2. What volume level would produce the same total costs regardless of the machine purchased? 3. What is the most profitable alternative for producing 230,000 switches per year and what is the total cost of that alternative?
Momix Corp. has two divisions, King and Queen. King produces a widget that Queen could use in its production. King's variable costs are $5 per widget while the full cost is $8. Widgets sell on the open market for $14 each. If King is operating at capacity, what would be the cost savings if the transfer were made and Queen currently is purchasing 145,000 units on the open market? $0 $700,000 $800,000 $1,200,000
produces cell phone covers for all makes and models of cell phones. Cell Design sells 1,050,000 units each year at a price of $10 per unit and a contribution margin of 40%. LOADING... (Click the icon for additional information.) The current costs of quality are as follows: LOADING... (Click the icon to view the costs.) The QC manager and controller have forecast the following additional costs to modify the production process: LOADING... (Click the icon to view the additional costs.) Requirement If the improvements result in a 60% decrease in product replacement cost and a 70% decrease in customer returns, what is the impact on the overall COQ and the company's operating income? What should Cell Design do? Explain. What is the impact on the overall COQ and the company's operating income? (Use parentheses or a minus sign for a net cost.) Amount Benefits of quality improvements $409,500 Cost of making quality improvements…
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please solve the sub-parts to be solved. thanks Ziggy Creations makes and sells a single product. Individual product details are as follows: Selling price $ 45 Direct materials $20 Direct labour $10 Fixed Costs $480 000 Estimated sales 36 000 units Production capacity 40 000 units d) If Ziggy’s required a profit of $90 000, what level of sales dollars would be required? e) Variable costs are to increase by $5 per unit. If Ziggy’s wants to maintain a profit of $90,000, what will be the required sales volume? Can Ziggy’s achieve this new estimated sales volume?