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Refer to the information in Exercise 8-17. For the coming year, Triumph Corporation has told Julius Company that it will be switched to an activity- based pricing system or it will be dropped as a customer. In addition to regular prices, Julius will be required to pay:
Order processing (per order)................. $11
Additional handling costs if order marked rush (per order)..... $19
Technical support calls (per call)................ $21
Required:
a. Calculate the profitability of the Julius Company account if activity is the same as in the prior year.
b. Is it realistic to expect Julius Compass activity to be the same this year as the previous year if activity-based pricing is instituted? How might Julius Company react to the new pricing scheme? How might its order behavior change as a result of the new fees?
Montson, Inc. produces a product requiring three square feet at $6 per square foot. If the desired ending inventory is $18,000 and the beginning inventory is $36,000, how many units must Montson produce to make direct materials purchases $54,000?
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Do transferred in costs occur in all departments of a manufacturer using a process costing system? Explain.
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List three debt-related ratios, and discuss how these ratios are used to assess a company's performance.
A few questions though could be asked to make it easier for me to understand. Some of these are: What would you consider as an individual product? What are cost drivers?
Aussie Yarn Co. is a U.S. producer of woolen yarn made from wool imported from Australia. Raw wool is processed, spun, and finished before being shipped out to knitting and weaving companies.
What is the total amount of the costs listed above that are direct costs of the Shoe Department?
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