Compute the production cost per unit under each plan

Assignment Help Accounting Basics
Reference no: EM133014517

Question - Ayayai Industries had sales in 2016 of $7,600,000 and gross profit of $1,199,000. Management is considering two alternative budget plans to increase its gross profit in 2017.

Plan A would increase the selling price per unit from $8.00 to $8.40. Sales volume would decrease by 10% from its 2016 level. Plan B would decrease the selling price per unit by $0.50. The marketing department expects that the sales volume would increase by 107,000 units.

At the end of 2016, Ayayai has 48,000 units of inventory on hand. If Plan A is accepted, the 2017 ending inventory should be equal to 5% of the 2017 sales. If Plan B is accepted, the ending inventory should be equal to 64,000 units. Each unit produced will cost $1.80 in direct labor, $1.40 in direct materials, and $1.20 in variable overhead. The fixed overhead for 2017 should be $1,762,000. Compute the production cost per unit under each plan.

Reference no: EM133014517

Questions Cloud

How much is the impairment loss recognized : On January 1, 2020, Tigreal Bank granted a 10%, P3,000,000 loan to Kagura Company. How much is the impairment loss recognized
What should be the maximum price to be paid per unit : If the South Company decided to purchase only M2, what should be the maximum price to be paid per unit of M2 instead of internal manufacture
What annual interest rate is Bill paying on his loan : Bill borrowed RM100,000 today that he must repay in 10 annual end-of-year installments of RM14,902. What annual interest rate is Bill paying on his loan
How much will you have in the account : Question - You deposit $ 8,878 in an account earning 5 % interest compounded monthly. How much will you have in the account in 16 years
Compute the production cost per unit under each plan : The fixed overhead for 2017 should be $1,762,000. Compute the production cost per unit under each plan
What is musli weighted average cost of capital : Musli has debt outstanding with a market value of RM2.2 billion. What is Musli's weighted average cost of capital
Calculate the trend index for these years respectively : If you know that the amount of assets for the base year 2018 was 7826, the year 2019 was 8693, Calculate the trend index for these years respectively
What are the relevant costs for Ruby : Gem Inc. has contacted Ruby with an offer to sell 5,000 of the subassemblies for P1,350 each. What are the relevant costs for Ruby
Stages of the software engineering process : Develop components of the Software Specification and Design Documents discussed in lectures. Student groups should be formed by Session five

Reviews

Write a Review

Accounting Basics Questions & Answers

  What is the margin of safety in dollars

Fire Company is a service firm with current service revenue of $900,000 and a 40% contribution margin. What is the margin of safety in dollars

  Compute total annual expenditures for department

Compute total annual expenditures for this department assuming it performs governmental- Type activities and is accounted for in the General Fund

  Would drumz international bank make a gain or suffer a loss

Would Drumz International Bank make a gain or suffer a loss? Provide the journal entry which the bank would prepare to record this transaction in its books

  Compute how much will the preferred stockholders receive

Assuming that P105,000 will be distributed as a dividend in the current year, how much will the preferred stockholders receive?

  Contract negotiations-calculate the after-tax cost

Calculate the after-tax cost of each payment assuming she has a 25 percent marginal tax rate. $800 to reimburse the cost of meals incurred by employees while travelling for the business $1,200 for football tickets to entertain out-of-town clients ..

  How to calculate roe using income statement

How to calculate ROE using income statement and the balance sheet. What values should use, what is the formula. how to calculate average Share hOlder equity?

  Prepare budgeted income statements for each month

Lilliput, a one-product mail-order firm, buys its product for $60 per unit and sells it for $130 per unit. The sales staff receives a 10% commission.

  Excel company has costs of 100000 up to split off at split

excel company has costs of 100000 up to split off. at split off it has 1000 units of product a and 2000 units of

  How much is the total net adjustments for payable

Compute the amount that should be reported on the financial position as current liability in United As One Inc. on December 31, 2018

  Discuss measures times interest earned

Compute the following measures Times interest earned

  Prepare the adjusting general journal entry

Use this information to prepare the adjusting General Journal entry (without explanation) to close any over or under application of factory overhead

  Determine the manufacturing margin for Tiffany Company

Variable selling and administrative expenses 28,800. Determine the manufacturing margin for Tiffany Company for the month of March

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