Perform an incremental analysis, Cost Accounting

Assignment Help:

Bakers Bagels LLC produces and sells 20 types of bagels by the dozen. Bagels are priced at $6.00 per dozen (or $0.50 each) and cost $.020 per unit to produce. The company is considering processing the bagels further into two products.: bagels with cream cheese and bagel sandwiches. It would cost an additional $0.50 per unit to produce bagels with cream cheese, and the new selling price would be $2.50 each. It would cost an additional $1.00 per sandwich to produce bagel sandwiches, and the new selling price would be $3.50 each.

1. Identify the relevant per-unit costs and revenues for the alternatives. Are there any sunk costs?
2. Based on the information in requirement 1, should Bakers Bagels expand its product offerings?
3. Suppose that Bakers Bagels did expand its product line to include bagels with cream cheese and bagel sandwiches. Based on customer feedback, the company determined that it could further process those two products into bagels with cream cheese and fruit and bagel sandwiches with cheese. The company's accountant compiled the following information:

Sales.revenue.if.sold.w/o.further.processing &Sales.Rev.if.Processed &Further Processing Costs
Bagels with cream cheese [$2.50 ][$3.50][ Fruit : $1.00]
Bagel sandwiches [3.50][ 4.50 ][Cheese: $0.50]

Perform an incremental analysis to determine if Bakers Bagels should process its products further. Explain your findings.

 


Related Discussions:- Perform an incremental analysis

Prepare a cash flow forecast, 1.  Prepare a cash flow forecast for the prop...

1.  Prepare a cash flow forecast for the proposal to launch SafeCus in 2010 for a three-year period from 1 January 2010 using the data in the body of the Case Study and discount at

The weaknesses of an incremental budgeting system, Traditional budgeting  s...

Traditional budgeting  systems are  incremental  in nature and  tend  to  focus on  cost  centres.  Activity-based  budgeting  links  business  planning  to  the  budgeting  proces

Evaluate equivalent annual cost, An industrial drill costs $60.000 to purch...

An industrial drill costs $60.000 to purchase and $10,000 to install seven years ago. The market value now is $33.000 and this will decline by 12% of current value each year for th

Objectives of cost accounting, OBJECTIVES OF COST ACCOUNTING 1)To help ...

OBJECTIVES OF COST ACCOUNTING 1)To help in the development of long range plans by provided that cost data that acts as a origin for projecting data for planning. 2)To make s

Calculate the minimum annual sales, a factory operates a small canteen but ...

a factory operates a small canteen but its annual operation has consistently shown a loss:

Multiple products, Multiple Products, Selling Costs, and Margin Management ...

Multiple Products, Selling Costs, and Margin Management Selling charge are oftentimes variable. For instance, a salesperson can be paid a designated percentage of entire sales

calculate the percent interest rate and effective cost, 1. The following t...

1. The following three one-year "discount" loans are available toyou: Loan A: $120,000 at a 7 percent discount rate Loan B: $110,000 at a 6 percent discount rate Loan

Prepare a statement of cash flows, Bickering Ltd Income Stateme...

Bickering Ltd Income Statement for the year ended 30 June 2012   Sales (credit)                                                                           636,10

Interpret the data and make recommendations based on, FDP Company produces ...

FDP Company produces a variety of home security. Gary Price, the company’s president, is concerned with the fourth quarter market demand for the company’s products. Unless someth

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