Charlevoix Cases makes mobile phone cases. The company has collected the following price and cost characteristics:$12.00 per caseSales priceVariable costsFixed costs5.50 per case390,000 per yearExercise 3-34 (Static) Basic Decision Analysis Using CVP (LO 3-1)Assume that the company plans to sell 75,000 units annually. Consider requirements (b), (c), and (d) Independently of each other.Required:a. What will be the operating profit?b. What is the impact on operating profit if the sales price decreases by 20 percent? Increases by 10 percent?Note: Do not round intermediate calculations.c. What is the impact on operating profit if variable costs per unit decrease by 20 percent? Increase by 10 percent?Note: Do not round intermediate calculations.d. Suppose that fixed costs for the year are 20 percent lower than projected and variable costs per unit are 20 percent higher thanprojected. What Impact will these cost changes have on operating profit for the year? Will profit go up? Down? By how much?Note: Do not round Intermediate calculations.Complete this question by entering your answers in the tabs below.Required A Required B Required C Required D

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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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(The following information applies to the questions displayed below.] Charlevoix Cases makes mobile phone cases. The company has collected the following price and cost characteristics: Sales price Variable costs Fixed costs $ 12.00 per case 5.50 per case 397,800 per year Exercise 3-34 (Algo) Basic Decision Analysis Using CVP (LO 3-1) Assume that the company plans to sell 76,200 units annually. Consider requirements (b), (d). and (d) independently of each other. Required: a. What will be the operating profit? b. What is the impact on operating profit if the sales price decreases by 20 percent? Increases by 10 percent? Note: Do not round intermediate calculations. c. What is the impact on operating profit if variable costs per unit decrease by 20 percent? Increase by 10 percent? Note: Do not round intermediate calculations. d. Suppose that fixed costs for the year are 20 percent lower than projected and variable costs per unit are 20 percent higher than projected. What impact will these…
Cullumber, Inc. makes computer bags that sell for $30 each. For the coming year, management expects fixed costs to be $239,010. Variable costs are $21 per unit.
TB MC Qu. 23-112 (Static) Pinkin Incorporated needs to determine a price... Pinkin Incorporated needs to determine a price for a new phone model. Pinkin desires a 25% markup on the total cost of the phone. Pinkin expects to sell 30,000 phones. Additional information is as follows: Variable Costs per Unit Direct materials Direct labor Overhead General and administrative Multiple Choice Using the total cost method what price should Pinkin charge? O O $156.10 $162.50 $130.10 Fixed Costs (total) O $142.50 O $161.25 $ 15 Overhead 49 General and administrative 20 50 $ 85,000 65,000
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QRC Company is trying to decide which one of two alternatives it will accept. The costs and revenues associated with each alternative are listed below: Projected revenue Unit-level costs Batch-level costs Product-level costs Facility-level costs What is the differential revenue for this decision? Multiple Choice O $110.000 $85,000 $205,000 Alternative A $205,000 39,000 26,500 29,000 24,000 $290,000 Alternative B $290,000 50,000 38,000 31,000 26,500
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Wham Company sells electronic squirrel repellants. The following data are given: Unit selling price $55.00 Variable costs ratio (Variable costs as a % of selling price) 39.00% Total fixed costs $45,000 Number of units sold 2,500 What is the magnitude of operating leverage? Round your answer to two digits. A. 2.16 B. 1.64 C. 0.46 D. 1.38 E. 3.54
Skip Consulting helped Schmidt Roofers put various cost saving techniques into place. Thecontract specifies that Skip will receive a flat fee of $70,000 and an additional $19,000 if Schmidtattains a target amount of cost savings. Skip estimates a 20% chance that Schmidt will reach thetarget for cost savings. Assuming that Skip uses the expected-value approach, what is thetransaction price for this product?a. $19,000b. $70,000c. $73,800d. $89,000
Bates Company plans to add a new item to its line of consumer product offerings. Two possible products are under consideration. Each unit of Product A costs $18 to produce and has a contribution margin of $9, while each unit of Product B costs $30 and has a contribution margin of $10. What is the differential revenue for this decision? Multiple Choice O O $21 $1 $13 $12
An automated turning machine is the current constraint at Jordison Corporation. Three products use this constrained resource. Data concerning those products appear below: LN JQ RQ Selling price per unit $ 167.36 $ 303.39 $ 411.96 Variable cost per unit $ 136.00 $ 212.11 5 303.18 Minutes on the constraint 1.60 5.60 7.40 Rank the products in order of their current profitability from most profitable to least profitable. In other words, rank the products in the order in which they should be emphasized. (Round your intermediate calculations to 2 decimal places)
Wilderness Products, Incorporated, has designed a self-inflating sleeping pad for use by backpackers and campers. The following information is available about the new product: a. An investment of $1,350,000 will be necessary to carry inventories and accounts receivable and to purchase some new equipment needed in the manufacturing process. The company's required rate of return is 24% on all investments. b. A standard cost card has been prepared for the sleeping pad, as shown below: Direct materials Direct labor Manufacturing overhead (20% variable) Total standard cost per pad Standard Quantity or Hours 4.0 yards 2.4 hours 2.4 hours Standard Price or Rate $2.70 per yard $8.00 per hour $12.50 per hour Standard Cost $10.80 19.20 30.00 $ 60.00 c. The only variable selling and administrative expense will be a sales commission of $9 per pad. The fixed selling and administrative expenses will be $732,000 per year. d. Because the company manufactures many products, no more than 38,400 direct…

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