15. Dauntless Company has an annual plant capacity of 13,000 product units. Predictedoperations for the year are summarized:Sales (10,000 units)Manufacturing costs:fixedVariableSelling and administrative expenses :Fixed$840,000$330,000$64 per unit$90,000Variable (advertising)$10 per unitIf the company accepts a special order from a customer for 1,000 units at a selling price of$78, there will be no effect at all on regular sales at regular prices. No advertising expensewill be required for the special order, but a special promotion cost of $18,000 will berequired. Compute the total amount of the increase or decrease in the company's budgetedoperating income that would be caused by the acceptance of this order.a. increase of 4,000b. decrease of 6,000c. decrease of 4,000d. increase of 6,000e. None of the above

In accounting and finance, incremental analysis is a useful decision-making method that involves…

Answered: 15. Dauntless Company has an annual…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A company sells one of its products for $13.80 per unit. Its fixed costs are $1,080.00 per month, and the variable cost per unit is $4.80. The production capacity is 625 units per month. (a) The break-even volume, i.e., the level of output at break-even, is per month. (If necessary, round up to the next whole number of units.) (b) The break-even volume as a percent of capacity is your answer to two decimal places.) units (d) The net income at the break-even level of output is $ %. (If necessary, round (c) The break-even revenue, i.e., the total revenue at the break-even level of output, is $ per month.
A Company produces a single product which sells for $20 per unit. Variable Cost is $15 and fixed cost for the year is $630,000 Required: (1) Calculate Sales value needed to earn profit of 10% on sales (2) Calculate sales price per unit if BEP down to 120,000 units
The BZ-91825 company charges a price of $242 per unit of its product. The company's variable cost per unit is $55. The BZ-91825 company on average sells 8,200 units per month. Fixed expenses are $878,000 per month. The company considers cutting the selling price by $29 and increasing its advertising budget by $63,000 per month. The company predicts monthly sales quantity to increase by 22%. What is the overall effect on the BZ-91825 company's monthly net operating income of these changes? (Note: A POSITIVE number indicates an INCREASE in net operating income, and a NEGATIVE number indicates a DECREASE in net operating income) Multiple Choice -15,768 dollars 63,520 dollars 13,800 dollars -63,840 dollars
Leonard Corporation produces and sells 10,000 units of Product X each month. The selling price of Product X is $40 per unit, and variable expenses are $32 per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $70,000 of the $120,000 in monthly fixed expenses charged to Product X would not be avoidable even if the product was discontinued. If Product X is discontinued, the annual financial advantage (disadvantage) for the company of eliminating this product should be: O ($30,000) O $30,000 O $40,000 O ($40,000)
Flying Cloud Co. has the following operating data for its manufacturing operations: Unit selling price $239 Unit variable cost $108 Total fixed costs $842,000 The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%. Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%. If sales prices are held constant, the next break-even point for Flying Cloud Co. will be Oa. increased by 858 units Ob, decreased by 858 units Oc. increased by 686 units Od. increased by 1,029 units
Burgandy Manufacturing produces a single product that sells for $100. Variable costs per unit equal $40. The company expects total fixed costs to be $80,000 for the next month at the projected sales level of 2300 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately. What is the current breakeven point in terms of number of units? (Round the final calculation up to the next whole number.) O A. 800 units OB. 1227 units O C. 1334 units OD. 2000 units
Houpe Corporation produces and sells a single product. Data concerning that product appear below: Per Unit Percent of Sales Selling price $ 140 100% Variable expenses 42 30% Contribution margin $ 98 70% Fixed expenses are $490,000 per month. The company is currently selling 6,000 units per month. The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $11 per unit. In exchange, the sales staff would accept a decrease in their salaries of $58,000 per month. (This is the company's savings for the entire sales staff.) The marketing manager predicts that introducing this sales incentive would increase monthly sales by 100 units. What should be the overall effect on the company's monthly net operating income of this change?
Lusk Corporation produces and sells 14,300 units of Product X each month. The selling price of Product X is $25 per unit, and variable expenses are $19 per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $72,000 of the $102,000 in monthly fixed expenses charged to Product X would not be avoidable even if the product was discontinued. If Product X is discontinued, the monthly financial advantage (disadvantage) for the company
Rowe Tool and Die (RTD) produces metal fittings as a supplier to various manufacturing firms in the area. The following is the forecasted income statement for the next quarter, which is the typical planning horizon used at RTD. RTD expects to sell 47,000 units during the quarter. RTD carries no inventories. Sales revenue Costs of fitting produced Gross profit Administrative costs Operating profit Amount $ 1,250, 200 958, 800 $ 291,400 220,900 $ 70,500 Per Unit $ 26,60 20.40 $6.20 4.70 $ 1.50 Fixed costs included in this income statement are $305,500 for depreciation on plant and machinery and miscellaneous factory operations and $95,500 for administrative costs. RTD has received a request for 10,000 fittings to be produced in the next quarter from Endicott Manufacturing. Endicott has never purchased from RTD, although they have been a local company for many years. Endicott has offered to pay $20.20 per unit. RTD can easily produce the 10,000 units with its existing capacity. Production…
Subject:- Account
Craylon Manufacturing produces a single product that sells for $100. Variable costs per unit equal $25. The company expects total fixed costs to be $60,000 for the next month at the projected sales level of 1,000 units. The operating income for the next month is : Select one: a. 15,000 b. 60,000 c. 135,000 d. 75,000
According to its original plan, Thornton Consulting Services Company plans to charge its customers for service at $127 per hour in Year 2. The company president expects consulting services provided to customers to reach 49,000 hours at that rate. The marketing manager, however, argues that actual results may range from 44,000 hours to 54,000 hours because of market uncertainty. Thornton's standard variable cost is $44 per hour, and its standard fixed cost is $1,320,000. Required Develop flexible budgets based on the assumptions of service levels at 44,000 hours, 49,000 hours, and 54,000 hours. Flexible Budget 44,000 Hours Flexible Budget Flexible Budget 49,000 Hours 54,000 Hours

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