The salespeople at Metlock, a notebook manufacturer, commonly pressured operations managers to keep costs down so the companycould give bigger discounts to large customers. Richard, the operations supervisor, leaked the $0.65 total unit cost to salespeople, whowere thrilled, since that was slightly lower than the previous year's unit cost. Budgets were not yet finalized for the upcoming year, soit was unclear what the target unit cost would be. Richard knew the current year's operating capacity was two million notebooks, andMetlock produced and sold just that many. The detailed breakdown of the $0.65 total unit cost is as follows.Direct materialDirect laborVariable overheadFixed overheadTotal cost per unit(a)(b)Total fixed costsGross marginYour answer is correct.What were Metlock's total fixed costs? If the average selling price was $2.10, how much gross margin did the company generate?$0.15Fixed costs0.15Total cost per unit0.15Gross margin0.20$0.65Save for LatereTextbook and Media$$If Metlock incurs exactly the same total fixed costs but produces and sells only 1,600,000 notebooks this coming year, whathappens to the fixed cost per unit? In turn, what would the total cost per unit be? If the average selling price stays at $2.10, howmuch gross margin would be earned? (Round per unit answers to 2 decimal places, e.g. 15.25.)Increasede Textbook and Media4000002900000✓ by $$$per unitAttempts: 1 of 3 usedper unitAttempts: 0 of 3 usedSubmit Answer

Variable Cost :— It is the cost that changes with change in cost driver. Variable cost per cost…

The salespeople at Metlock, a notebook manufacturer, commonly pressured operations managers to keep costs down so the company could give bigger discounts to large customers. Richard, the operations supervisor, leaked the $0.65 total unit cost to salespeople, who were thrilled, since that was slightly lower than the previous year's unit cost. Budgets were not yet finalized for the upcoming year, so it was unclear what the target unit cost would be. Richard knew the current year's operating capacity was two million notebooks, and Metlock produced and sold just that many. The detailed breakdown of the $0.65 total unit cost is as follows. Direct material Direct labor M Variable overhead 0.15 Fixed overhead 0.20 Total cost per unit $0.65 (a) (b) Your answer is correct. What were Metlock's total fixed costs? If the average selling price was $2.10, how much gross margin did the company generate? Gross margin Total fixed costs $ $0.15 0.15 Fixed costs eTextbook and Media Total cost per unit Gross margin $ Save for Later If Metlock incurs exactly the same total fixed costs but produces and sells only 1,600,000 notebooks this coming year, what happens to the fixed cost per unit? In turn, what would the total cost per unit be? If the average selling price stays at $2.10, how much gross margin would be earned? (Round per unit answers to 2 decimal places, e.g. 15.25.) eTextbook and Media 400000 2900000 Increased ✓ by $ $ $ per unit Attempts: 1 of 3 used per unit Attempts: 0 of 3 used Submit Answer

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter15: Decision Analysis

Section: Chapter Questions

Problem 5P: Hudson Corporation is considering three options for managing its data warehouse: continuing with its...