Solution-What is the minimum price that the ayayai managers

What is the minimum price that the ayayai managers

Assignment Help Cost Accounting

Reference no: EM132106908

The Ayayai packages and distributes three grades of animal feed. The material cost per tonne and estimated annual sales for each of the products are listed here:

Material Estimated Product Cost Sales

Super Premium $10.75 2,000 tonnes Premium 9.00 2,800 tonnesEconomy 8.00 5,000 tonnes

The fixed cost of operating the machinery used to package all three products is $10,100 per year. In the past, prices have been set by allocating the fixed operating cost to products on the basis of estimated sales in tonnes. The resulting full costs (material costs plus allocated fixed operating cost) are then marked up 100%. The Ayayai has received an offer from a foreign firm for 900 tonnes of the premium-grade feed. Sales to the foreign firm would not affect domestic sales but would require a $1,800 increase in fixed production costs.

(c) Using only quantitative information, what is the minimum price that the Ayayai's managers should be willing to accept from the foreign firm?

Reference no: EM132106908

Questions Cloud

Design a secure enterprise wireless network : Wireless Networks and Security - Design and implementation of secure enterprise wireless network - Explore the ethical implications in the design and implement

What was the balance in opeth moh control account : At the end of 2016, before doing any closing entries, what was the balance in Opeth's MOH control account?

Fishermen and packers are employed on an hourly : Sales people mostly deliver the product and are paid on a salaried basis; their salaries are included in administrative and selling expenses.

Calculate the cost of job completed : Calculate the cost of each job completed. (Round overhead rate to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 5,125.)

What is the minimum price that the ayayai managers : Using only quantitative information, what is the minimum price that the Ayayai's managers should be willing to accept from the foreign firm?

Operating-running in the short run : From the following given functions of demand and cost of a firm: Q=500-20P TC=18Q + 6Q² - 0.10Q³. Would you confer if the firm operating/running in the short ru

What are imports : If Net exports are -$114 billion and the exports are $857 billion. What are imports? that is, in fact, negative 114 in this illustration.

Calculate the break-even sales in units : If fixed costs increase $31,500 with no other cost or revenue factors changing, calculate the break-even sales in units

Which department should be leased and why : Considering all the relevant factors, which department should be leased and why? Used by permission of McGraw-Hill

User Account

All Pages

What is the minimum price that the ayayai managers

Reference no: EM132106908

Reference no: EM132106908

Questions Cloud

Reviews

Write a Review

Cost Accounting Questions & Answers

Cost accounting assignment

Prepare the journal entries

Advise as to the liability of all the parties

Prepare revenues budget

Effect of exchange rate changes on cash and cash

Corporate governance

Cost-benefit analysis

Non-annual interest rates and annuities

Job costing in service organizations

Accounting for bad debt expense

Accounting and partnership problems

Development of relevant cash flows

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT