Calculate the nonvalue-added cost per unit, Cost Accounting

Assignment Help:

Question

Roseville, Ltd., sells one of its products for $500 each. Sales volume averages 1,000 units per year. Recently, its main competitor priced their competing product at 10 percent below Roseville's price. Roseville expects its sales to drop dramatically unless it matches the competitor's price. Despite the anticipated price reduction, Roseville would like to maintain its current profit per unit.

Information regarding the inputs required to produce 1,000 units of product is as follows:

                                    SQ

                        AQ

          Actual Cost

Materials (kilograms)

7,800

8,000

$160,000

Labour (hours)

600

720

108,000

Setups (hours)

-0-

600

34,000

Material handling (moves)

-0-

300

58,000

Warranties (number repaired)

-0-

200

60,000







(A) Calculate the target cost for maintaining current market share and profitability.

(B) Calculate the nonvalue-added cost per unit.

(C) If nonvalue-added costs can be reduced to zero, can the target cost be achieved? Explain your answer.


Related Discussions:- Calculate the nonvalue-added cost per unit

Prepare the journal entry to record stock, Rosco Company purchased 35,000 s...

Rosco Company purchased 35,000 shares of common stock of Paxton Corporation as a long-term investment for $900,000. During the year, Paxton Corporation reported net income of $300,

Account, contract account formate

contract account formate

Budgetary planning and control, Budgetary Planning and Control Budgeti...

Budgetary Planning and Control Budgeting refers to the process of quantifying the plans of an organization such as to enable it get its objectives in the defined duration.  Th

Draw the demand curve - quantity of trash, The total demand (marginal benef...

The total demand (marginal benefit) curve for visiting Yosemite is as follows: Price = 5000-10*NumberOfTrips -10*TonsOfVisibleTrash.     a. Suppose the quantity of trash=100 ton

Determine operating cash flow, What are the missing amounts for the below a...

What are the missing amounts for the below amortization table, given the following information? -  A firm borrows $100,000 from a bank. -  The terms of the loan require the f

Job order costing, Amazing acrobatics performs acrobatics in stadiums aroun...

Amazing acrobatics performs acrobatics in stadiums around the world. The average show sells about 1,000 tickets at $60 per ticket. Each show requires a team of 45 highly trained sp

Variance, It is important to have performance measures to evaluate managers...

It is important to have performance measures to evaluate managers as they control resources and invest in assets for the company. Describe how you could use different variances (ac

Price and quality aspect of variance, Price and Quality Aspect of Variance ...

Price and Quality Aspect of Variance At this point it is serious to understand that all variance has two aspects, a price aspect and a quantity aspect: these two aspects combi

Determine the price of the bond , Andrew Industries is contemplating issuin...

Andrew Industries is contemplating issuing a 30-year bond with a coupon rate of 7% (annual coupon payments) and a face value of $1000. Andrew believes it can get a rating of A from

Administration costs budget, Administration Costs Budget This represe...

Administration Costs Budget This represents the costs of all administration expenses. Every department or budget centre will be responsible for the preparation of its own bud

Write Your Message!

Captcha
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