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
nirvana33 [79]
3 years ago
14

Stuart Modems has excess production capacity and is considering the possibility of making and selling paging equipment. The foll

owing estimates are based on a production and sales volume of 2,600 pagers. Unit-level manufacturing costs are expected to be $36. Sales commissions will be established at $2.60 per unit. The current facility-level costs, including depreciation on manufacturing equipment ($76,000), rent on the manufacturing facility ($66,000), depreciation on the administrative equipment ($16,800), and other fixed administrative expenses ($79,950), will not be affected by the production of the pagers. The chief accountant has decided to allocate the facility-level costs to the existing product (modems) and to the new product (pagers) on the basis of the number of units of product made (i.e., 6,600 modems and 2,600 pagers).
a. Determine the per-unit cost of making and selling 2,600 pagers. (Do not round intermediate calculations. Round your answer to 3 decimal places.)b. Assuming the pagers could be sold at a price of $50 each, should Stuart make the pagers?
Business
1 answer:
Paha777 [63]3 years ago
8 0

Answer:

Stuart Modems

a. The per-unit cost of making and selling 2,600 pagers is:

= $64.55

b. Assuming that Stuart could sell the pagers at a price of $50 each, it should still go with the plan to make and sell the pagers.  The variable cost for producing a pager is $38.60.  Each pager will make a unit contribution margin of $11.40, which will help to offset the facility-level costs since they will not be influenced by the production of the pagers.

Explanation:

a) Data and Calculations:

Production and sales volume = 2,600 pages

Unit-level manufacturing costs = $36

Total manufacturing costs = $93,600 ($36 * 2,600)

Sales commissions = $6,760 ($2.60 * 2,600)

Facility-level costs:

Depreciation on manufacturing equipment       ($76,000)

Rent on the manufacturing facility                     ($66,000)

Depreciation on the administrative equipment ($16,800)

Other fixed administrative expenses                ($79,950)

Total facility-level costs = $238,750

Overhead rate = $25.95 ($238,750/9,200)

Cost of making and selling 2,600 pagers:

Total manufacturing costs =           $93,600

Overhead costs ($25.95 * 2,600)    67,470

Sales commissions =                           6,760

Total cost of making and selling  $167,830

Unit cost = $64.55 ($167,830/2,600)

Variable cost of making and selling a unit of pager:

Unit-level manufacturing costs = $36.00

Sales commissions =                      $2.60

Total variable costs =                   $38.60

Revenue per unit =                      $50.00

Contribution per unit =                  $11.40

You might be interested in
What is accounting ?​
AnnZ [28]

Answer:

it is the study of the systematic way of keeping records.

4 0
2 years ago
Instructions:wikarambulan is a sound like game. by saying\pronouncing and connecting the word, reveal the elements and factors o
Airida [17]

Answer:

1.strengths

2.opportunities

3.weakneses

4.threats

5.industry

6.environment

8.economic

9.supliyer

10.customer

4 0
2 years ago
In "open market operations" to __________ M1, the securities held by a commercial bank (or the public) are exchanged for "cash"
Hoochie [10]

Answer:

expand

Explanation:

In "open market operations" to expand M1, the securities held by a commercial bank (or the public) are exchanged for "cash" from the Fed (the transfer of funds from the Fed to a bank.

The Fed buys securities from banks holding it, for money; so as to increase the supply of money in the economy.

4 0
3 years ago
g You own shares of a company that reported after-tax earnings of $29 million and has issued 2 million shares of stock. The comp
musickatia [10]

Answer: 0.35

Explanation:

The Price to Earnings ratio is used to value companies and is calculated by dividing the company's stock price by its earnings per share.

Earnings per share = 29,000,000/2,000,000 shares

= $14.50

PE ratio = Share price / Earnings per share

= 5.09/14.50

= 0.35

4 0
3 years ago
Firms pursuing a ________ strategy focus on the realization of location and experience curve economies.
Kazeer [188]

Firms pursuing a global standardization strategy focus on the realization of location and experience curve economies.

<h3>What is a global standardization strategy?</h3>

The capacity to apply standardized marketing messaging and campaigns across markets, regions, and cultures is referred to as a global standardization strategy. Global standardization is used by the world's largest brands, such as Adidas and Coca-Cola, to offer a consistent brand experience across countries and languages.

For example, the Coca-Cola Company uses global standardization in marketing by keeping the product's presentation largely consistent throughout markets. Even though several languages are shown on the items, the corporation uses the same design motif.

These advantages include cost reduction, international price reduction, competitive decrease, market position consolidation, and promotion of a distinct international image.

To know more about global standardization strategy follow the link:

brainly.com/question/17159333

#SPJ4

8 0
1 year ago
Other questions:
  • Brianna and Jess live in Taxland, which only has one tax, an income tax. Both Brianna and Jess pay $1,000 in taxes each year but
    14·1 answer
  • A comparative advantage is the ability of a country to produce a particular good or service at a lower ____________ than another
    5·1 answer
  • BE10.4 (LO 2), AP Gundy Company expects to produce 1,200,000 units of Product XX in 2020. Monthly production is expected to rang
    13·1 answer
  • At the beginning of the year, Vici Ventures had accounts receivable of $220,000. At the end of the year, the company had account
    14·1 answer
  • The difference between Karson's behavior at the end of the 12 weeks versus the promise to cure Karson of ADHD can be described a
    13·1 answer
  • The risk-free rate is 4%, the market risk premium is 8%, and the market return is 12%. Stock Y's beta is 1.85 and the standard d
    12·1 answer
  • A company issues a 10-year, callable bond at par with 8% annual coupon payments. The bond can be called at par in one year after
    14·1 answer
  • Halsted Corp. has identified three cost pools in its manufacturing process: equipment maintenance, setups, and quality control.
    15·1 answer
  • Determine how each event affects the position of the long-run aggregate supply (LRAS) curve.
    6·1 answer
  • When the university’s provost sets a major student retention goal, the cascading-goals process would occur if the.
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!