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Effectus [21]
3 years ago
12

Ortega Company manufactures computer hard drives. The market for hard drives is very competitive. The current market price for a

computer hard drive is $54. Ortega would like a profit of $14 per drive. What target cost Ortega should set to accomplish this objective
Business
1 answer:
Talja [164]3 years ago
7 0

Answer:

$40

Explanation:

Target cost is the cost per unit arrived at after having deducted the required profit margin from the competitive market price.

It is a management technique that makes management think about ways to achieve a set target cost rather than forcing their actual cost plus profit margin on customers.

In this case, the competitive market price is $54 per unit of hard drive whereas the company expects to achieve a total profit of $14  per unit  

Profit margin per unit=$14

competitive market price=$54

Target cost=competitive market price-profit margin per unit

Target cost=$54-$14

Target cost=$40

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That is called withdrawal, glad to help!
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3 years ago
How to find the monthly growth rate of sales that can be sustained without access to external capital?
Mazyrski [523]

Growth rate of sales= present-past\past.

Growth rate:

  • A growth rate is determined differently for each business, but it essentially serves as a gauge for how quickly a firm is expanding, contracting, or meeting its objectives. It is the best gauge of how well a company (or nonprofit, or mission) is doing.
  • Sustainable Growth Rate (SGR) = Retention Rate× Return on Equity
  • A crucial statistic for determining how well your organization is doing is growth month over month. Subtract the first month from the second month, then divide the result by the amount for the previous month to determine the month-over-month growth. The result is multiplied by 100 to yield a percentage.
  • The maximum sales growth that a company can experience without needing more debt or equity financing is known as the sustainable growth rate.

Learn more about growth rate here brainly.com/question/25849702

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8 0
1 year ago
Haylock Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 8,40
Talja [164]

Answer:

Total cash disbursement August= $102,510

Explanation:

Giving the following formula:

Direct labor hours= 8,400

Variable overhead rate= $1.30 per direct labor-hour.

Fixed overhead= 100,470 - 8,880= $91,590

Depreciation expense is not a cash disbursement cost.

<u>We need to calculate the cash disbursement for August:</u>

Total variable overhead= 8,400*1.3= 10,920

Total fixed overhead= 91,590

Total cash disbursement August= $102,510

6 0
3 years ago
Sommer, Inc., is considering a project that will result in initial aftertax cash savings of $1.79 million at the end of the firs
iren [92.7K]

Answer:

Maximum initial cost would be $58,116,883.12

Explanation:

1,790,000 increased at 3%

WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})

Ke 0.119 + 0.02 = 0.139

ER 0.15

Kd(after-tax) Kd(1-t) = 0.047

DR 0.85

WACC = 0.139(0.15) + 0.047(.85)

WACC 0.06080

Now that we have the rate, we calculate the present value using the gordon method

1,790,000 / (0.06080-0.03) = 58,116,883.12

4 0
3 years ago
You are a manager for a monopolistically competitive firm. From experience, the profit-maximizing level of output of your firm i
Paraphin [41]

Answer:

hi your question lacks the required options here is the complete question and options

You are a manager for a monopolistically competitive firm. From experience, the profit-maximizing level of output of your firm is 100 units. However, it is expected that prices of other close substitutes will fall in the near future. How should you adjust your level of production in response to this change

a. Produce less than 100 units

b. Insufficient information to decide

c. Produce 100 units

d. Produce more than 100 units

Answer : Produce less than 100 units

Explanation:

A monopolistic firm is a firm that has the sole responsibility or sole ownership of the right of production of certain goods and services. and such products are profit maximizing products because the demand for the products determines the price in the market and also the products are produced at marginal cost equaling its marginal revenue.

From experience when the prices of the close substitutes of the product fall the demand for the product will decrease hence its market price will fall therefore it is wise to produce less than the usual 100 units to still maximize profit.

5 0
3 years ago
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