Almo company manufactures and sells adjustable canopies

Assignment Help Accounting Basics
Reference no: EM13588888

Almo company manufactures and sells adjustable canopies that attach to motor homes and trailers. Almo developed its budget for the current year assuming that the canopies would sell at a price of $500 each. The variable expenses for each canopy were forecasted to be $300 and the annual fixed expenses were forecasted to be $210,000. Almo had targeted a profit of $510,000.

While Almo's sales usually rise during the second quarter, the May financial statements reported that sales were not meeting expectations. For the first five months of the year, only 460 units had been sold at the established price, with variable expense as planned, and it was clear that the target profit for the year would not be reached unless some actions were taken. Almo's president assigned a management committee to analyze the situation and develop several alternative courses of action. The following three alternatives were presented to the president, only one of which can be selected.

1.Reduce the selling price by $40. The marketing department forecasts that with the lower price, 3,800 units could be sold during the remainder of the year.

2.Lower variable expenses per unit by $30 through the use of less expensive materials. Because of the difference in materials, the selling price would have to be lowered by $35 and sales of 3,300 units for the remainder of the year are forecast.

3.Cut fixed expenses by $15,000 and lower the selling price by 10 percent. Sales of 3,100 units would be expected for the remainder of the year.

Reference no: EM13588888

Questions Cloud

Oakmont company has an opportunity to manufacture and sell : oakmont company has an opportunity to manufacture and sell a new product for a four-year period. the companys discount
On 31st march 2009 the total assets and external : on 31st march 2009 the total assets and external liabilities were 200000 and 6000 respectively. during the year the
Assume the company uses a process costing system to : 360 property videos company is a service company that creates in-home videos for real estate agents to help sellrent
In addition to the data given previously assume that the : wendells donut shoppe is investigating the purchase of a new 33700 donut-making machine. the new machine would permit
Almo company manufactures and sells adjustable canopies : almo company manufactures and sells adjustable canopies that attach to motor homes and trailers. almo developed its
On february 28 2014 the balances of the accounts appearing : on february 28 2014 the balances of the accounts appearing in the ledger of foldaway furnishings company a furniture
Advise the shareholders how the payments in note xiv will : the following financial information relates to a suburban retail business serendipity pty ltd that owns and operates a
What is the balance in the work in process inventory : pedriani company uses a job order cost system and applies overhead to production on the basis of direct labor cost. on
Volcker inc manufactures recliners for the hotel industry : volcker inc. manufactures recliners for the hotel industry. it has two products the heater and the massager and total

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd