bartlebvoomld.the cheatersEDITECQ Inc. is in the process of completing labor negotiations for the coming year. Part ofthese negotiations call for an increase in the base wage rate for direct labor from P10to P12 per hour, with a corresponding increase in fringe benefits. At present, fringebenefits amount to 35% of total wages, and this percentage will remain unchangedwith the new contract. The present labor standards call for 8 direct labor hours perunit of output. Other conversion costs amount to P40 per unit, of which 75% is forvariable costs. Materials costs amount to $8 per unit. Administrative costs are fixedand amount to P10 per unit at the present production level. Products are sold with agross margin of 30% on sales.Compute the new selling price to be charged if there is no increase in productivity as aresult of the new labor contract.•..MoreAdd to Story

A pricing decision is a process of determining the price of the product. Various factor affects this…

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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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Suppose you are the human resource manager for a cellular phone company with 700 employees. Top management has asked you to implement three additional fringe benefits that were negotiated with employee representatives and agreed upon by a majority of the employees. These include group term life insurance, a group legal services plan, and a wellness center. The life insurance is estimated to cost $520 per employee per quarter. The legal plan will cost $468 semiannually per employee. The company will contribute 40% to the life insurance premium and 75% to the cost of the legal services plan. The employees will pay the balance through payroll deductions from their biweekly paychecks. In addition, they will be charged 1 4 % of their gross earnings per paycheck for maintaining the wellness center. The company will pay the initial cost of $800,000 to build the center. This expense will be spread over 5 years. (a) What total amount should be deducted per paycheck for these new…
Skysong, Inc. is a company that manufactures and sells a single product. Unit sales for each of the four quarters of 2025 are projected as follows. Quarter Units First 91,200 Second 171,000 Third 627,000 Fourth 136,800 Annual total 1,026,000 Skysong incurs variable manufacturing costs of $0.40 per unit and variable nonmanufacturing costs of $0.40 per unit. Skysong will incur fixed manufacturing costs of $820,800 and fixed nonmanufacturing costs of $1,231,200. Skysong will sell its product for $4 per unit. (a) Determine the amount of net income Skysong will report in each of the four quarters of 2025, assuming actual sales are as projected and employing the integral approach to interim financial reporting. (Ignore income taxes.) Repeat the analysis under the discrete approach. (Round answers to O decimal places, e.g. 5,125. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) 1st Quarter Income before taxes (Integral Approach)…
CompanyX, a small (fictitious) company, is considering switching to the 2-year Acme2 battery for the smartphones it issues to employees. CompanyX supplies 1 phone each to 100 employees. The battery that CompanyX currently uses lasts 1 year, costs CompanyX $50 for the battery itself, and costs CompanyX $60 in labor to replace each battery. Assume the replacement labor cost stays constant no matter what battery is used. What is the VIU price for the Acme2 battery in this application? HINT: First, calculate the current annual cost related to batteries, and then set that amount to the VIU cost equation, including parts and labor. $160 $110 $50 $42.50
Your Company produces 5,000 units of Product X each year. Each unit of Product X sells for $8 and has a contribution margin of $5. If Product X is discontinued, $18,000 of fixed overhead would be eliminated. What is the impact of discontinuing Product X on the company's overall operating income?
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Andre’s Hair Styling in Jamaica has five barbers. Each barber is paid $9.90 per hour and works 40 hours per week and a 50 week year, regardless of the number of haircuts. Rent and other fixed expenses are $1,750 per month. Assume that the only service performed is the giving of haircuts, the unit price of which is $12. Required: a. Find the contribution margin per haircut. Assume that the barbers’ compensation is a fixed cost. b. Determine the annual break-even point in number of haircuts. c. What will be the operating income if 20,000 haircuts are sold? d. Suppose Andre revises the compensation method. The barbers will receive $4 per hour plus $6 for each haircut. What is the new contribution margin per haircut? What is the annual break-even point (in number of haircuts)? e. Ignore requirements c and d and assume that the barbers cease to be paid by the hour but receive $7 for each haircut. What is the new contribution margin per haircut? The annual…
Pacifica Industrial Products Corporation makes two products, Product H and Product L. Product H is expected to sell 36,000 units next year and Product L is expected to sell 7,200 units. A unit of either product requires 0.9 direct labor-hours. The company's total manufacturing overhead for the year is expected to be $3,304,800. What is the overhead cost per unit for Product L if the overhead cost per unit for Product H is $45.90
A door manufacturer decides to sell each door for $ 479. It has a manufacturing cost ofdoor is $ 237 and fixed costs are $ 4,114 a week.1. How many doors should you produce and sell each week in order to guaranteethe business to break even?2. If you sell 65 doors per month you could guarantee your breakeven point. Explain your answer.
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Apex Corporation requires a chemical finishing process for a product under contract for a periodof six years. Three options are available. Neitheroption 1 nor option 2 can be repeated after its process life. However, option 3 will always be availablefrom H&H Chemical Corporation at the same costduring the period that the contract is operative. Hereare the options:• Option 1: Process device A, which costs$100,000, has annual operating and labor costs of$60,000 and a useful service life of four years withan estimated salvage value of $10,000.• Option 2: Process device B, which costs$150,000, has annual operating and labor costs of$50,000 and a useful service life of six years withan estimated salvage value of $30,000.• Option 3: Subcontract out the process at a costof $100,000 per year.According to the present-worth criterion, whichoption would you recommend at i = 12%?
Suppose you are the human resource manager for a cellular phone company with 700 employees. Top management has asked you to implement three additional fringe benefits that were negotiated with employee representatives and agreed upon by a majority of the employees. These include group term life insurance, a group legal services plan, and a wellness center. The life insurance is estimated to cost $390 per employee per quarter. The legal plan will cost $312 semiannually per employee. The company will contribute 40% to the life insurance premium and 75% to the cost of the legal services plan. The employees will pay the balance through payroll deductions from their biweekly paychecks. In addition, they will be charged 1 4 % of their gross earnings per paycheck for maintaining the wellness center. The company will pay the initial cost of $800,000 to build the center. This expense will be spread over 5 years. (a) What total amount should be deducted per paycheck for these new…
The following data is available for Sunland Repair Shop for 2022: Repair technicians' wages $380000 Employee benefits 70000 Overhead Total 60000 $72.00. $108.00. $264.00. O $147.00. $510000 The desired profit margin is $45 per labor hour. The material loading charge is 40% of invoice cost. It is estimated that 5000 labor hours will be worked in 2022. In January 2022, Sunland repairs a bicycle that uses parts of $180. Its material loading charge on this repair would be

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