1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
MArishka [77]
2 years ago
6

Simon Corporation manufactures hydraulic valves. The product life of a valve is 4 years. Target average profit margin for Simon

20.00% The company does not expect the manufacturing cost to vary over the next 4 years. Estimated sales volume and the unit selling price of the valve for the next 4 years is given below: Year Sales volume (units) Unit selling price Year 1 40,000 $80.00 Year 2 50,000 $75.00 Year 3 35,000 $50.00 Year 4 25,000 $45.00 What is the allowable unit cost of a hydraulic valve using the target costing model
Business
1 answer:
Luda [366]2 years ago
6 0

Answer:

Allowable unit cost of a hydraulic valve using the target costing model = 52.4

Explanation:

Given that:

Simon Corporation manufactures hydraulic valves. The product life of a valve is 4 years.

Target average profit margin for Simon 20.00%

The company does not expect the manufacturing cost to vary over the next 4 years

Estimated sales volume and the unit selling price of the valve for the next 4 years is given below:

Year                  Sales volume (units)                   Unit selling price

Year 1                       40,000                                 $80.00

Year 2                      50,000                                 $75.00

Year 3                     35,000                                   $50.00

Year 4                      25,000                                  $45.00

The objective is to determine the allowable unit cost of a hydraulic valve using the target costing model.

The Cost for each unit selling price can be calculated as:

= unit selling price - (Target average profit margin × unit selling price)

For Year 1

=  $80.00- (0.2 × $80.00)

= $80.00 - $16.00

= $64.00

For Year 2

= $75.00 - ( 0.2 × $75.00)

= $75.00 - ( $15.00)

= $60.00

Year 3

= $50.00 - (0.2× $50.00)

= $50.00 - $10.00

= $40.00

Year 4

= $45.00 - (0.2 × $45.00)

=$45.00 - $9.00

= $36.00

Year       Sales volume    Unit                Cost          Cost per Unit

                (units)             selling price  

Year 1       40,000          $80.00          $64.00       $2560000

Year 2      50,000          $75.00          $60.00       $3000000

Year 3      35,000          $50.00          $40.00        $1400000

Year 4       25,000          $45.00         $36.00        $900000

Total:        150000                                                    $7860000

Allowable unit cost = Total cost/Total number of unit cost

Allowable unit cost = $7860000/150000

Allowable unit cost = 52.4

You might be interested in
Which of the following best describes how auto insurance companies manage risk
vfiekz [6]
<span>Which of the following best describes how auto insurance companies manage risk? Auto insurance companies will charge rates based on what they think is appropriate in regards to how likely you are to file a claim. They take into account many factors that will relate to filing a claim in the future and what you have done in the past. By evaluating these, they are determining the risk and how to manage it. </span>
6 0
3 years ago
The starting point in calculating net operating income is the total annual income the property would produce assuming 100% occup
Viefleur [7K]

Answer:

B. potential Gross

Explanation:

Potential gross income refers to the gross income at 100% occupancy. On the other hand, effective gross income takes into account vacancy as well as other variables like collection loss.

3 0
3 years ago
Low Fly Airline is expected to pay a dividend of $7 in the coming year. Dividends are expected to grow at the rate of 15% per ye
Bond [772]

Answer:

Intrinsic value of the stock = $46.67

Explanation:

D1 = $7

Required return = 30%

Growth rate = 15%

Intrinsic value of the stock = D1 / (Required return - Growth rate)

Intrinsic value of the stock = $7/(0.3 - 0.15)

Intrinsic value of the stock =  $7 / 0.15

Intrinsic value of the stock = $46.67

4 0
3 years ago
Which one of the following statements concerning interest rates is correct?
DIA [1.3K]
Where is the statements or answer choices?
6 0
3 years ago
McDonald's "Plan to Win" strategy has added healthy food options to its menu, phased out traditional artery-clogging trans fats,
Anarel [89]
The correct answer will be A
7 0
3 years ago
Other questions:
  • According to Wallach, what is short-termism, and why is it a problem?
    5·1 answer
  • PLEASE HELP QUICKLY: (FIRST ANSWER GETS BRAINLIEST)
    6·1 answer
  • which ICS functional area sets the incident objectives ,strategies and priorities and has overall responsibility for the inciden
    15·2 answers
  • The ____, implemented in 2001, grants federal authorities expanded surveillance and intelligence-gathering powers, such as broad
    6·1 answer
  • Many products available to the public before world war i contained _______, which was accepted early on as a relatively harmless
    6·1 answer
  • On March 1, Retro Inc. reported a balance in Supplies onf $200. During March, the company purchased supplies for $950 and consum
    9·1 answer
  • The ________ in the Sigma Six cost-of-quality (COQ) equation includes the internal costs before the product is sold (like waste
    11·1 answer
  • How old do you have to be to work at lululemon
    13·1 answer
  • Having unique accounts set up to access patient data is….
    10·1 answer
  • a bond with a face value of $1,000 has 12 years until maturity, has a coupon rate of 5.4%, and sells for $1,087. what is the yie
    11·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!