Find abay engineering total cost function

Assignment Help Managerial Accounting
Reference no: EM132639663

Abay Engineering sells returnable containers to major food processors.

The price received for the containers is Br 2 per unit. Of this amount Br 1.25 is profit contribution. Abay Engineering is considering an attempt to differentiate its product through quality improvement at a cost of 5p per unit. Current profits are Br 40,000 on sales of 100,000 units.

Question a. Assuming that average variable costs are constant at all output levels, find Abay Engineering's total cost function before the proposed change.

Question b. Calculate the total cost function if the quality improvement is implemented.

Question c. Calculate Abay Engineering's break-even output before and after the change, assuming it cannot increase its price.

Question d. Calculate the increase in sales that would be necessary with the quality improvement to increase profits to Br 45,000.

Reference no: EM132639663

Questions Cloud

Prospective payment or retrospective payment : Which do you believe is more effective as a financial plan: prospective payment or retrospective payment?
Have they launched new product : Have they launched a new product? Have they been involved in a scandal? Have they recently been fined for lack of compliance?
Discussion about the cultural object : Cultural object is understood in a broad manner as an object, space that ‘communicates' cultural or symbolic values and can entail an advertisement, a garment.
Strategic choices : Determine one key distinction between each of the following strategies: adaptive, market entry, and competitive.
Find abay engineering total cost function : Assuming that average variable costs are constant at all output levels, find Abay Engineering's total cost function before the proposed change.
Why cultural self-awareness assists people : Discuss how and why cultural self-awareness assists people to be more culturally intelligent. Draw on your experiences to help illustrate key points made.
Concept of product life cycle analysis : Examine the concept of product life cycle analysis. Determine two reasons why the Boston Consulting Group (BCG) portfolio analysis
Explain why restaurants want to develop dishes : Evaluate the success of each menu by obtaining feedback through customer satisfaction survey and Staff suggestions and Generate a range of ideas
Create mission and vision statement for your organization : Create a mission and vision statement for your organization. Determine three (3) specific strategic goals that align with the ideals

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Find how many units would abc inc sell in order to earn

Find How many units would ABC Inc. have to sell in order to earn operating income of $260,000?Selling price per unit (package of 2 CDs)

  What will be the effect of a sale of a piece of equipment

What will be the effect of a sale of a piece of equipment at book value for cash? A decrease in the debt-to-equity ratio./ A decrease in working capital

  Compute the cost of units completed and transferred

Compute the cost of units completed and transferred to the testing department. Compute the cost of the ending Work-in-Process.

  Prepare the production budget assuming the company believes

Prepare the Production Budget assuming The company believes it can meet future sales needs with an ending inventory of 25% of the next quarter

  Compare the two prices you just calculated

Compare the two prices you just calculated; why are the prices different? What is likely to happen to the quantity demanded if the company is forced to raise its price to the price calculated in part b?

  When absorption costing income is equal to variable costing

Absorption costing income is equal to variable costing income when? Beginning inventory = Production./ Sales = Production./ Beginning inventory = Sales

  What implication does the modern organization have

What implication does the modern organization have for the traceability of costs? How does this change affect the controllability of costs for decisions

  Calculate the total cash collections for month of january

Calculate the total cash collections for the month of January and February in the year 2020? Total Sales (January) - $78,625, Percentage of sales collected

  Calculate efficiency variance for variable set-up overhead

Calculate the efficiency variance for variable set-up overhead costs. OzPlastic Co. produces a special line of plastic toy racing cars.

  How did define investment for the analysis

If a company's net income is $10,000, its total assets are $100,000, its stockholders' equity is $20,000, what is its return on investment?

  What should tuition per student be

What should tuition per student be?What was the amount of operating income the flexible budget would have shown for the actual activity level for June?

  Compute the additional annual cash inflow

Using straight-line depreciation and an assumed 40% tax rate, compute the additional annual cash inflow if the old machine is replaced.

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