User Account

All Pages

Calculate indifference point between two cost structures

Assignment Help Accounting Basics
Reference no: EM133059469

Question - The cost structure of two firms competing in the same industry is represented by the following cost formulas: Company X = $2,276,000 + $50/unit; Company Z = $1,052,000 + $98/unit. The selling price is $145 per unit for both companies.

Required -

1. Calculate the indifference point between the two cost structures, that is, the amount of unit sales that produce the same operating income for Company X and Company Z.

2. If sales volume were expected to increase by 25% over the next two years, which cost structure would you prefer?

Reference no: EM133059469

Questions Cloud

What other factors might influence this decision : Your design team has produced two alternative designs for greenhouses in a developing country. What other factors might influence this decision
Calculate the price of the bond for the four possibilities : A $1,000 par value bond has an 8 percent coupon, which is paid on a semiannual basis. Calculate the price of the bond for the four possibilities
Compute the NPV for Project M : Question - Compute the NPV for Project M if the appropriate cost of capital is 9 percent
What should be the reported value of Montana inventory : Montana Co. has determined its year-end inventory on a FIFO basis to be $600,000. What should be the reported value of Montana inventory
Calculate indifference point between two cost structures : Calculate the indifference point between the two cost structures, that is, the amount of unit sales that produce the same operating income for Company X
BSBPMG518 Manage Project Procurement Assignment : BSBPMG518 Manage Project Procurement Assignment Help and Solution, Danford College - Assessment Writing Service
Describe what biometric security device : Describe what a biometric security device is and explain how your employer might use one to more of these devices to protect its servers.
Supply chain management benefits : The world of supply chain management benefits directly from using the creative and the critical side of your brain.
What potential type of fraud might have occurred : Question - Scenario - A Case of Corporate Fraud - What potential type of fraud might have occurred? How do you support this allegation

Reviews

Write a Review

Accounting Basics Questions & Answers

  Prepare the entries to close the revenue and expense account

The income statement for Crestwood Golf Club for the month ending July 31 shows Green Fee Revenue $13,600, Salaries Expense $8,200, Maintenance Expense $2,500, and Net Income $2,900.

  Review case-When Gross Income is Accrued

Merrill Lynch is a large securities firm which uses the accrual method of accounting in accordance with Generally Accepted Accounting Principles.

  Prepare ensinada purchases budgets for wax

Prepare Ensinada's purchases budgets for wax and die for each month of the second quarter and the total for the second quarter of 2010

  Compute what is the contribution margin ratio

Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units. Compute What is the contribution margin ratio?

  What is the relevant range - variable cost

The company is currently producing 3,300 units. According to these data, what is the relevant range over which the company can assume that the variable cost per unit is constant?

  What are the five questions that you as an external auditor

Suppose you are hired as the external auditor of the Walmart Company. What are the 5 questions that you as an external auditor would like to ask the CFO.

  Sally purchased a new computer five-year property on june 1

sally purchased a new computer five-year property on june 1 2013 for 4000. sally could use the computer 100 of the time

  How much is the cash received upon issuance

On Jan. 1, 2007, Manila company issued 5-year bonds with face value of 4,000,000 at 110. The company paid bond issue cost of 64,000 on same date.

  What are the variable costs per transaction

$750,000 for processing of 1,000,000 transactions and $850,000 for processing of 1,200,000 transactions. What are the variable costs per transaction?

  Responsibility report for the midwest division

Prepare a responsibility report for the Midwest Division for December 31, 2010 -  Midwest Division operates as a profit center

  Describe briefly cost of goods sold

Describe briefly cost of goods sold and the distinction between perpetual and periodic inventory procedures. Describe briefly cost of goods sold.

  What is the profitability of the remaining services

What is the profitability of the remaining services if all services with losses are dropped? Explain fully with spreadsheet illustration and text discussion

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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