Companys manufacturing and distribution cost

Assignment Help Financial Accounting

Reference no: EM13795335

Quantum Enterprises currently sells a piece of luggage for $200. An aggressive competitor has announced plans for a similar product that will be sold for $170. Quantum's marketing department believes that if the price is dropped to meet competition, unit sales will increase by 10%. The current cost to manufacture and distribute the luggage is $130, and Quantum has a profit goal of 30% of sales. If Quantum meets competitive selling prices, what must happen to the company's manufacturing and distribution cost?

Nothing, because the costs are within defined ranges and can actually increase by $10.00.

Nothing, because the costs are within defined ranges and can actually increase by $24.00.

Costs must decrease by $11.00.

Costs must decrease by $39.00.

None of these.

Reference no: EM13795335

Questions Cloud

Is the amount a debit or credit : Stephens Company has a deductible temporary difference of $2,000,000 at the end of its first year of operations. Its tax rate is 40 percent. Stephens has $1,800,000 of income taxes payable. At the end of the first year, after a careful review of all ..

About the savings account : Mike and Linda Jeter invested $10,000 in a savings account paying 4% annual interest when their daughter, Andrea was born. They also deposited $3,000 on each of her birthdays until she was 18 (including her 18th birthday). How much was in the savings..

What amount will harvey repay at the end of the third year : Harvey Company borrowed $80,000 on January 2, 2010. This amount plus accrued interest of 5% compounded annually will be repaid at the end of 3 years. What amount will Harvey repay at the end of the third year?

Practices have in your job performance or in the workplace : Explain why Dr. Peter Drucker is considered the guru of management. What impact do his management concepts and practices have in your job performance or in the workplace?

Companys manufacturing and distribution cost : Quantum Enterprises currently sells a piece of luggage for $200. An aggressive competitor has announced plans for a similar product that will be sold for $170. Quantum's marketing department believes that if the price is dropped to meet competition, ..

Aggressive competitor has announced plans for same product : Franco Electronics currently sells a camera for $310. An aggressive competitor has announced plans for a similar product that will be sold for $240. Franco's marketing department believes that if the price is dropped to meet competition, unit sales w..

Variable selling and administrative cost : The following costs relate to Southern Company: Variable manufacturing cost, $44; variable selling and administrative cost, $22; applied fixed manufacturing overhead, $29; and allocated fixed selling and administrative cost, $18. If Southern uses tot..

Comparison of depreciation methods : Ivan Manufacturing Company purchased a robot for $360,000 at the beginning of year 1. The robot has an estimated useful life of four years and an estimated residual value of $30,000. Compute the annual depreciation and carrying value for the robot f..

User Account

All Pages