What would be the impact on monthly sales

Assignment Help Cost Accounting

Reference no: EM132816074

Davis Kitchen Supply produces stoves for commercial kitchens. The costs to manufacture and market the stoves at the company's normal volume of 6,000 units per month are shown in the following table.

Unit manufacturing costs

Variable materials$51
Variable labor 76
Variable overhead 26
Fixed overhead 61
Total unit manufacturing costs $214
Unit marketing costs
Variable 26
Fixed 71
Total unit marketing costs 97
Total unit costs $311

Problem a. Market research estimates that volume could be increased to 7,000 units, which is well within production capacity limitations if the price were cut from $372 to $327 per unit. Assuming that the cost behavior patterns implied by the data in the table are correct.

a-1. What would be the impact on monthly sales, costs, and income?

a-2. Would you recommend taking this action?

Reference no: EM132816074

Questions Cloud

Classify and record of the transactions in uk : i. A Japanese insurance company purchases U.K. gilts for £76,000.00 and pays out of its bank account kept in London.

What impact would accepting the government contract : March manufacturing costs will be the proportionate fixed manufacturing cost, what impact would accepting the government contract have on March income?

Defense used by body to combat pathogens : Briefly describe the three lines of defense used by the body to combat pathogens and give one example of each.

Determine the future spot price : Mr. Stanford is a speculator who is considering the purchase of eight three-month Japanese yen call options. The option has a striking price of 96 cents per

What would be the impact on monthly sales : Market research estimates that volume could be increased to 7,000 units, What would be the impact on monthly sales, costs, and income?

Describe the role of educators and change agents : Read and familiarize yourself with all the manual therapy resources in Lesson 3 (Web links, Videos, Journal Articles, etc.). Use the Internet to further.

What are the gift tax consequences for arthur : On April 15, 2013, Arthur promises to pay Nancy, his niece, $50,000 if Nancy refrains from smoking for two years. What are the gift tax consequences?

The issues surrounding ownership of health information : Discuss the issues surrounding ownership of health information. Explain the access and disclosure rights of patients.

What is the profit margin for mildenhall co : Mildenhall Co. has $1,040,000 in assets and $649,000 of total debt. It reports net income of $120,000, and has asset turnover of 4x. What is the profit margin?

User Account

All Pages