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AlekseyPX
2 years ago
5

The following information relates to the only product sold by Mastrolia Manufacturing. Sales price per unit $ 45 Variable cost p

er unit 27 Fixed costs per year 252,000 a. Compute the contribution margin ratio and the dollar sales volume required to break even. b. Assuming that the company sells 20,000 units during the current year, compute the margin of safety (in dollars).
Business
1 answer:
Oduvanchick [21]2 years ago
8 0

Answer:

a. 40 % and $630,000

b. $ 270,000

Explanation:

The contribution margin ratio = Contribution ÷ Sales

The dollar sales volume required to break even = Fixed Cost ÷ contribution margin ratio

the margin of safety (in dollars) - company sells 20,000 units = Expected Sales - Break even Sales  

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Interdepartment Services: Step Method
Stells [14]

Answer:

O'Brian's Department Stores

a) Determination of the percentage of total personnel department services that was provided to the Payroll department

Since allocation of the personnel department services is based on the number of employees, we can use this to calculate the percentage.  The personnel employees are not included in this calculation.

= 4/32 x 100 = 12.5%

b) Percentage of total payroll department services provided to the personnel department.  Since the basis is the gross payroll, we can use this to calculate the percentage.  The gross payroll of the Payroll department is not included in the calculation.

= $6,000/$42,100 x 100 = 14.3%

c)                          Personnel  Payroll  House-     Clothing   Furniture    Total

                                                         Ware

Direct department

  cost               $ 7,800  $ 3,200    $ 12,200   $ 20,000  $ 16,750  $59,950

Number of

  employees       5              4                8               16             4             37

Gross payroll $ 6,000  $ 3,300    $ 10,600     $ 17,400    $ 8,100   $45,400

Total cost      $13,800   $6,500    $22,800     $37,400  $24,850  $105,350

Allocation of service departments costs, using the step method:

Personnel      -13,800      1,725          3,450         6,900       1,725       13,800

Payroll              0           -8,225           2,415         3,965        1,845       8,225

Total allocated 0               0          $28,665    $48,265   $28,420 $105,350

Explanation:

a) Data:

                        Personnel  Payroll  House-     Clothing   Furniture    Total

                                                         Ware

Direct department

  cost               $ 7,800  $ 3,200    $ 12,200   $ 20,000  $ 16,750  $59,950

Number of

  employees       5              4                8               16             4             37

Gross payroll $ 6,000  $ 3,300    $ 10,600     $ 17,400    $ 8,100   $45,400

b) Cost allocation & Calculations:

Personnel (based on the number of employees)

Rate = $13,800/32 = $431.25 per employee

Payroll (based on gross payroll)

Rate = Payroll cost = Payroll cost divided by the total gross payroll in the other departments, excluding personnel and payroll departments

= $8,225/$36,100 = $0.2278 per gross payroll

c) Allocation of service departments' costs is a method of apportioning costs incurred by service departments to the production departments in order to include all the costs in the product costs.  Three methods exist for allocating service departments' costs to the production departments.  The first, which is the simplest, is the direct method.  With this method, the costs of service departments are allocated directly to each production department based on the consumption of the service department's services.  They are not allocated to other service departments.

The second method is the step method.  Here, the costs of one service department with the highest cost are allocated to all other departments first, including production and other service departments following a step.  The costs of the next service department with the highest costs are allocated to the remaining departments.  This step is continued until all the service departments' costs have been allocated.  Once the costs of a service department have been completely allocated, that department would not be allocated any other cost.

The Reciprocal method, which is the last method, is the most accurate and complicated method.  This method first establishes the relationship among the service departments in equation form and uses the established equations to allocate the costs of service departments.  We may not discuss it further than this.

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3 years ago
The more precisely defined the target market is, the _____ the numbers are to estimate.
bija089 [108]
The answer is a I believe I'm not really sure
4 0
3 years ago
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Sea Company reports the following information regarding its production cost. Units produced 47,000 units Direct labor $ 40 per u
ratelena [41]

Answer:

Unitary variable cost= $95

Explanation:

Giving the following information:

Direct labor $ 40 per unit

Direct materials $ 33 per unit

Variable overhead $ 22 per unit

<u>The variable costing method incorporates all variable production costs (direct material, direct labor, and variable overhead).</u>

Unitary variable cost= 40 + 33 + 22

Unitary variable cost= $95

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2 years ago
Marble Construction estimates that its WACC is 10 percent ifequity comes from retained earnings. However, if the company issuesn
dedylja [7]

Answer:

Projects E,F and G should NOT be considered.

Optimal Capital  is $5,750,000

Explanation:

The accept-or-reject rule, using the IRR method, is to acceptthe project if its Internal Rate of Return (IRR) is higher than theWeighted Average Cost of Capital(k) [r>k]. The project shall berejected if its internal rate of return is e lower than theWeighted Average Cost of Capital cost of (r<k)

                                 Accept if        r>k

                                 Reject if         r<k

                                   Mayaccept if r = k

If the Weighted Average Cost of Capitl (WACC) is less than IRRrate, then the project has positive NPV; if it is equal to IRR, theproject has a Zero NPV, and if it is greater than the IRR, theproject has negative NPV.

The projects should be accepted as the rate of return on theproject is higher than the WACC(10.8%) which means that theprojects will be profitable as the returns are higher than the costof the project (capital).  Considering this projects E,F and G should NOT be considered.

And considering the sizes the Optimal Capital  is $5,750,000 (the addition of sizes of all projects)

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Explanation:

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