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Consider the following information, prepared based on a capacity of 40,000 units:
Category Cost per UnitVariable manufacturing costs $5.00Fixed manufacturing costs $1.50Variable marketing costs $1.00Fixed marketing costs $0.50Capacity cannot be added in the short run and the firm currently sells the product for $10 per unit.Consider each of these scenarios independent of each other.a) The company is currently producing 30,000 units per month. A potential customer has contacted the firm and offered to purchase 10,000 units this month only. The customer is willing to pay $5.50 per unit. Since the potential customer approached the firm, there will be no variable marketing costs incurred. Should the company accept the special order? Why or why not? Be specific.b) Assume the same facts as in part a, except that the company is producing 40,000 units per month. Should the company accept the special order? Why or why not? Be specific.c) List and describe other factors (not those addressed in parts a and b) that should be taken into consideration when deciding whether to accept a special order? Be specific in your responses.Question #3a) What is life-cycle costing? Under what circumstances can it be most useful? What are some potential problems with this approach? Be specific in your responses.b) What is target pricing? Under what circumstances can it be most useful? What are some potential problems with this approach? Be specific in your responses.c) What is cost-plus pricing? Under what circumstances can it be most useful? What are some potential problems with this approach? Be specific in your responses.
USES O F CVP ANALYSIS 1. .It allows preparation of flexible budgets. 2. It provides help in forecasting accurate profit. 3. It aids in formulating price policy. 4
Under a contract with the provincial government, ChemLabs Inc. analyzes the chemical and bacterial composition of well water in various municipalities in the interior of British Co
The gross earnings of the factory workers for Vargas Company during the month of January are $66,000. The employer's payroll taxes for the factory payroll are 8,000. The fringe ben
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Corporation has determined the contribution margin ratio is 35% and the income tax rate is 40%. Required: A) Assume break-even volume in dollars is $1,500,000. What are total fixed
Fixed Costs Are costs such do not change along with of the level of output? It is also named as autonomous cost, as it stays the similar irrespective of the activity level as
Requirements of Uniform Costing 1. Uniform costing systems must process the given features as: 2. Cost reports and statements should be organized and laid out in a same for
what would your answer be to the following problem, please show detailed calculations: The XYZ Company manufacturers Part 123 for use in its production line. The manufacturering co
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OBJECTIVES OF COST ACCOUNTING : 1-DETERMINING SELLING PRICE 2-CONTROLING COST 3- PROVIDING INFORMATION FOR DESING MAKING 4-ASCERTAINING COSTING PROFIT 5-Facilitating preparation of
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