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PtichkaEL [24]
3 years ago
8

Alex Ltd. produces kitchen tools, and operates several divisions as profit centers. Division M produces a product that it sells

to other companies for $16 per unit. It is currently operating at its full capacity of 45,000 units per year. Variable manufacturing cost is $9 per unit, and variable marketing cost is $3 per unit. The company wishes to create a new division, Division N, to produce an innovative new tool that requires the use of Division M's product (or one very similar). Division N will produce 30,000 units. Currently, Division N can purchase a product equivalent to Division M's from Company X for $15 per unit. However, Alex Ltd. is considering transferring the necessary product from Division M. Required: 1) Assume the transfer price is $12 per unit. How would this affect the purchasing costs of Division N
Business
1 answer:
alexira [117]3 years ago
4 0

Answer:

Division N's purchase costs will decrease by $90,000 per year

Explanation:

Division N's purchase cost form outside vendor = total units purchased per year x unit price = 30,000 units x $15 = $450,000

if Division N obtains the product form division M with a transfer price of $12 per unit, their costs will decrease by = total units x (vendor price - transfer price) = 30,000 units x ($15 - $12) = $90,000 per year

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The phases of project management are: A. planning, scheduling, and controlling. B. planning, programming, and budgeting. C. plan
o-na [289]

Answer:

A. planning, scheduling, and controlling.

Explanation:

The phases of project management are -

1. Initiation

2. Planning

3. Execution - Scheduling

4. Control

5. Close

Option A is correct because the answer includes the 2nd, 3rd, and fourth phases of project management.

Option B is wrong because programming is not a phase of project management. Option C is a combination of management functions. Therefore, it is incorrect. Option D is not correct as the service project is not different from the manufacturing project. Option E is the project management technique.

4 0
3 years ago
The Tanner Company's April 30 pre-reconciliation cash balance on its books was $35,000. While preparing the April 30 bank reconc
Natalija [7]

Answer:

$38,950

Explanation:

Given that,

Cash balance on its books = $35,000

Outstanding checks = $11,000

Deposits in transit = $7,000

Bank service charges = $50

Tanner's April 30 cash balance per the bank statement:

= Cash balance in books + outstanding checks - Deposits in transit - Bank service charge

= $35,000 + $11,000 - $7,000 - $50

= $38,950

Therefore, cash balance as per bank statement is $38,950.

6 0
3 years ago
Gasoline and bicycles are complements in consumption. Suppose we increase the federal gasoline tax to $1 per gallon. What are th
dalvyx [7]

Answer: A

Explanation:

A complementary good is a product that is used together with another product. Without its complement, such a good will have little value. When there is increase in the price of a particular product, the demand of its complement reduces because consumers may not be able to use the complement on its own.

Complements have negative cross elasticity of demand i.e there is increase in the demand for a product when the price of its complement reduces. If bicycles and gasoline are complements, an increase in tax on gasoline will have a negative effect on the demand for bicycle. Due to the price increase of gasoline, less people will demand for bicycle. The initial change that will occur as a result of this is that as there is a price increase for gasoline, there will be a leftward shift in the demand for bicycle. This implies that less bicycle will be demanded for.

7 0
3 years ago
Identify any significant changes that your organization might reasonably make in its product offerings in the next 3 years. Expl
frutty [35]

Answer:

1- Change the advertising image of the brand. Every year trends change and therefore adjustments must be made so that the products adapt to the modern.

2- Market study to know if the products are advancing according to the project according to the participation of the square.

3- In the market study, the prices must also be reviewed, which must be consistent with the competition

4- Discounts could be offered on the products, to attract new customers.

The competitive advantages of performing these actions is that the products and in the consumer's mind will always be updated.

8 0
3 years ago
Horace Company manufactures a professional-grade vacuum cleaner and began operations in 2020. For 2020, Horace budgeted to produ
Paladinen [302]

Answer:

Horace Company

1. 2020 Income Statement using variable costing

Sales revenue                      $7,992,000

Variable Cost of goods sold:

Manufacturing costs            $2,183,000

Marketing cost per unit sold  $851,000

Contribution margin           $4,958,000

Fixed Costs:

Manufacturing costs $1,550,000

Administrative costs   $906,000

Marketing costs        $1,479,000

Total fixed costs =            $3,935,000

Net income =                     $1,023,000

2. 2020 Income Statement using absorption costing:

2. Sales revenue                      $7,992,000

Cost of goods sold:

Variable Manufacturing costs $2,478,000 ($118 * 21,000)

Fixed Manufacturing costs        1,550,000

Total cost of production         $4,028,000

Less Ending Inventory                 479,525

Cost of goods sold                 $3,548,475

Gross profit                            $4,443,525

Period costs:

Variable marketing costs $851,000

Fixed marketing costs     1,479,000

Administrative costs         906,000

Total period costs                $3,236,000

Net income                           $1,207,525

3. The differences that Horace obtains in the operating incomes under variable costing and absorption costing are due to the fixed manufacturing costs that are included in the ending inventory under absorption costing, making the cost of goods sold to be less and resulting in more profits. Under variable costing, the ending inventory does not include the fixed manufacturing costs.  So the cost of goods sold is higher, resulting in reduced profits.

4. A bonus for Horace's supervisors based on gross margin under absorption costing will entice supervisors to produce more and  sell less products so that the fixed costs can be carried forward.  Many products will be left in inventory at the end of the period, which is then carried forward to the following period, thus, enhancing the period's gross profit for maximum bonus for the supervisors.

Modifications that Horace management could make to improve the bonus plan is ensuring that production units do not exceed the budgeted sales units by a large margin and ensuring that ending inventory does not exceed an established limit.  This will entice the supervisors to produce according to market demand.

Explanation:

a) Data and Calculations:

Budgeted production and sales units for 2020 = 25,000

Actual production units for 2020 = 21,000

Actual sales unit for 2020 = 18,500

Ending inventory units for 2020 = 2,500

Selling price per unit = $432

Sales revenue = $7,992,000 ($432 * 18,500)

Variable cost:

Manufacturing cost per unit produced:

Direct materials                        $33

Direct manufacturing labor     $23

Manufacturing Overhead       $62 $118

Marketing cost per unit sold  $46

Total variable costs per unit $164

Fixed cost:

Manufacturing costs $1,550,000

Administrative costs   $906,000

Marketing costs        $1,479,000

Total fixed costs =   $3,935,000

1. 2020 Income Statement using variable costing

Sales revenue                      $7,992,000 ($432 * 18,500)

Variable Cost of goods sold:

Manufacturing costs            $2,183,000 ($118 * 18,500)

Marketing cost per unit sold  $851,000 ($46 * 18,500)

Contribution margin           $4,958,000 ($268 * 18,500)

Fixed Costs:

Manufacturing costs $1,550,000

Administrative costs   $906,000

Marketing costs        $1,479,000

Total fixed costs =            $3,935,000

Net income =                     $1,023,000

2. Sales revenue                      $7,992,000

Cost of goods sold:

Variable Manufacturing costs $2,478,000 ($118 * 21,000)

Fixed Manufacturing costs        1,550,000

Total cost of production         $4,028,000 (per unit = $191.81)

Less Ending Inventory                 479,525 ($191.81 * 2,500)

Cost of goods sold                 $3,548,475

Gross profit                            $4,443,525

Period costs:

Variable marketing costs $851,000

Fixed marketing costs     1,479,000

Administrative costs         906,000

Total period costs                $3,236,000

Net income                           $1,207,525

7 0
3 years ago
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