You are the Sales Manager for your company and you are evaluating orders from two customers...
You are the Sales Manager for your company and you are evaluating orders from two customers but can accept only one of the orders because of your company’s limited capacity.
The first order is for 100 units of a product with a contribution margin ratio of 60% and a selling price of $1,000. (hint CM is 60% *$1000)
The second order is for 500 units of a product with a contribution margin ratio of 20% and a selling price of $800. The incremental fixed costs are the same for both orders. Which order do you accept?
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You are the Sales Manager for your company and you are
evaluating orders from two customers...
You are the Sales Manager for your company and you are evaluating orders from two customers...
You are the Sales Manager for your company and you are evaluating orders from two customers but can accept only one of the orders because of your company’s limited capacity. The first order is for 100 units of a product with a contribution margin ratio of 60% and a selling price of $1,000. (hint CM is 60% *$1000) The second order is for 500 units of a product with a contribution margin ratio of 20% and a selling price of...
You are an account manager at Owens & Minor, a distributor of hospital supplies. You have...
You are an account manager at Owens & Minor, a distributor of hospital supplies. You have two customers, Alpha Hospital and Beta Hospital. Your value proposition is to provide each customer with high-quality hospital supplies at the time, in the order quantity, and through the sales channel (online orders or through salespeople) desired by the hospital. Below are your company’s direct product cost and activity rates, and each customer’s activity levels. Direct (Traceable) Cost per unit sold $3.46/unit “Other” Cost...
UNTER COMPONENTS Star 150 150 Costs per unit Direct materials Direct labor Variable overhead Fixed overhead...
UNTER COMPONENTS Star 150 150 Costs per unit Direct materials Direct labor Variable overhead Fixed overhead Total cost per unit Price Units sold Star 100 130 $ 60 30 180 400 $ 580 $ 4,000 40 240 510 780 2,000 40 Additional Information: Variable overhead varies with quantity of direct labor-hours. Average wage rate per hour Plant capacity (in direct labor-hours) 20,000 Current production (in direct labor-hours) 10,000 Requirement a. Information: Star 100 2,500 400 $ Star 150 2,500 500...
Minnie Manufacturing Limited Minnie Manufacturing Limited produces 3 products: Product April, Product May and Product June....
Minnie Manufacturing Limited Minnie Manufacturing Limited produces 3 products: Product April, Product May and Product June. The company has an annual capacity of 4,160 hours of direct labour. The direct labour rate is $15/hour. Information on the products is as follows: $60 Product April Product May Product June Selling price per unit $70 $75 Variable expenses per unit Direct materials 20 25 30 Direct labour 24 12 18 Variable overhead 10 8 9 Contribution margin 16 15 18 Current yearly...
Tops Corporation is organized into two divisions, Manufacturing and Marketing. Both divisions are considered to be...
Tops Corporation is organized into two divisions, Manufacturing and Marketing. Both divisions are considered to be profit centers and the two division managers are evaluated in large part on divisional income. The company makes a single product. It is fabricated in Manufacturing and then packaged and sold in Marketing. There is no intermediate market for the product. The monthly income statements, in thousands of dollars, for the two divisions follow. Production and sales amounted to 10,000 units. Manufacturing Marketing Revenues...
Quinn machines company is evaluating two customer orders. It can accept only one because of capacity...
Quinn machines company is evaluating two customer orders. It can
accept only one because of capacity limitations. The data
associated with each order follow.
Required
A. Assume that Quinn has decided to accept one of the two
orders. Identify the information relevant to selecting one order
versus the other. Recommend which job to accept, and support your
answer with appropriate computations.
B. The customer presenting Order A has withdrawn it because of
its financial hardship. Under this circumstance, Quinn's choice...
Question 1: Special order Sales volume in units 90 Revenue $6,300 Variable costs $900 Contribution margin...
Question 1: Special order Sales volume in units 90 Revenue $6,300 Variable costs $900 Contribution margin $5,400 Fixed costs $1,600 Profit $18 Special order: A client wants to buy 10 units at a discounted price of $30 per unit. This is a one-time deal (l.e., a short-term decision). You have enough spare capacity to fulfill this special order without cutting back on your regular sales. a) Use the gross approach to decide whether you should take the special order: status...
3. As a logistics manager you are also responsible for selling your products and negotiate your...
3. As a logistics manager you are also responsible for selling your products and negotiate your selling prices. A local army unit places an order for 400 units of AK99 that you specially designed. Your cost structure is as follows: Material cost $60, labor cost $100 (based on 5 hours of labor @S20/hour), overhead cost is 50% of the labor and material costs, and profit is added as 20% of the three costs Based on the quality and usefulness of...
East Coast Digital (ECD) produces high-quality audio and video equipment. One of the company’s most popular...
East Coast Digital (ECD) produces high-quality audio and video equipment. One of the company’s most popular products is a high-definition personal video recorder (PVR) for use with digital television systems. Demand has increased rapidly for the PVR over the past three years, given the appeal to customers of being able to easily record programs while they watch live television, watch recorded programs while they record a different program, and save dozens of programs for future viewing on the unit’s large...
East Coast Digital (ECD) produces high-quality audio and video equipment. One of the company’s most popular...
East Coast Digital (ECD) produces high-quality audio and video equipment. One of the company’s most popular products is a high-definition personal video recorder (PVR) for use with digital television systems. Demand has increased rapidly for the PVR over the past three years, given the appeal to customers of being able to easily record programs while they watch live television, watch recorded programs while they record a different program, and save dozens of programs for future viewing on the unit’s large...
UNTER COMPONENTS Star 150 150 Costs per unit Direct materials Direct labor Variable overhead Fixed overhead Total cost per unit Price Units sold Star 100 130 $ 60 30 180 400 $ 580 $ 4,000 40 240 510 780 2,000 40 Additional Information: Variable overhead varies with quantity of direct labor-hours. Average wage rate per hour Plant capacity (in direct labor-hours) 20,000 Current production (in direct labor-hours) 10,000 Requirement a. Information: Star 100 2,500 400 $ Star 150 2,500 500...
Minnie Manufacturing Limited Minnie Manufacturing Limited produces 3 products: Product April, Product May and Product June. The company has an annual capacity of 4,160 hours of direct labour. The direct labour rate is $15/hour. Information on the products is as follows: $60 Product April Product May Product June Selling price per unit $70 $75 Variable expenses per unit Direct materials 20 25 30 Direct labour 24 12 18 Variable overhead 10 8 9 Contribution margin 16 15 18 Current yearly...
Quinn machines company is evaluating two customer orders. It can
accept only one because of capacity limitations. The data
associated with each order follow.
Required
A. Assume that Quinn has decided to accept one of the two
orders. Identify the information relevant to selecting one order
versus the other. Recommend which job to accept, and support your
answer with appropriate computations.
B. The customer presenting Order A has withdrawn it because of
its financial hardship. Under this circumstance, Quinn's choice...
Question 1: Special order Sales volume in units 90 Revenue $6,300 Variable costs $900 Contribution margin $5,400 Fixed costs $1,600 Profit $18 Special order: A client wants to buy 10 units at a discounted price of $30 per unit. This is a one-time deal (l.e., a short-term decision). You have enough spare capacity to fulfill this special order without cutting back on your regular sales. a) Use the gross approach to decide whether you should take the special order: status...
3. As a logistics manager you are also responsible for selling your products and negotiate your selling prices. A local army unit places an order for 400 units of AK99 that you specially designed. Your cost structure is as follows: Material cost $60, labor cost $100 (based on 5 hours of labor @S20/hour), overhead cost is 50% of the labor and material costs, and profit is added as 20% of the three costs Based on the quality and usefulness of...
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