Davis Kitchen Supply produces stoves for commercial kitchens. The costs to manufacture and market the stoves...

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Davis Kitchen Supply produces stoves for commercial kitchens. The costs to manufacture and market the stoves at the companys

Req A1 Req A2 Req B Reqc Req D Reg E1 Req E2 Req F1 Reg F2 Market research estimates that volume could be increased to 7,000

my WUR Reg A1 Req AZ ReqB Reqc Req D Req E1 Req E2 Reg F1 Reg F2 On March 1, the federal government offers Davis a contract t

Complete this question by entering your answers in the tabs below. Reg A1 Reg A2 Req B Reg C ReqD Req E1 Reg E2 Reg F1 Reg F2

Complete this question by entering your answers in the tabs below. Reg A1 Reg A2 Reg C ReqB Reg D Reg F1 Reg E1 Reg F2 Req E2

Complete this question by entering your answers in the tabs below. Reg A1 Req A2 Req B Reg C Req D Reg E1 Req E2 Reg F1 Reg F

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Answer 1

Answer #1

ANS. A1:

Var. Manufacturing cost = 44+69+19 = 132

	Before Price Reduction	After Price Reduction	Impact (amount)	Impact
Sales Price	402	357	45	Decrease
Quantity	6000	7000	1000	Increase
Revenue	2412000	2499000	87000	Increase
Var. Manufacturing cost	(792000)	(924000)	132000	Increase
Var. Marketing cost	(114000)	(133000)	19000	Increase
Contribution margin	1506000	1442000	64000	Decrease
Fixed Manufacturing cost	(324000)	(324000)	0	no change
Fixed Marketing cost	(384000)	(384000)	0	no change
Income	798000	734000	64000	Decrease

ANS. B:

Impact Revenue Var. Manufacturing cost Var. Marketing cost Contribution margin Fixed Manufacturing cost Fixed Marketing cost

ANS. C:

Variable Manufacturing cost = 132

Shipping cost per unit = 34

Marketing Costs ($6000/2000) = 3

Minimum Unit price = 132 + 34 + 3 = $169

ANS. F1:

Variable marketing cost ($19*20%*2000) = 7600

Variable Manufacturing cost [132*2000] = 264000

Contribution from modified Stove ($444-269-44)*1600 = 209600

Total In house cost savings = 7600 + 264000 + 209600 = 481200

Units = 2000

In House cost saving per unit = $481200 / 2000 = $240.6

ANS. E1:

Variable marketing cost ($19*20%*2000) = 7600

Fixed Manufacturing costs ($54*6000*25%) = 81000

Variable Manufacturing cost [132*2000] = 264000

Total In house cost savings = 7600 + 81000 + 264000 = 352600

Units = 2000

In House cost saving per unit = / 2000 = $176.3

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Answer 2

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