Each year, a company produces and sells 80,000 units of its only product for $40 per unit. The company's average unit costs at this level of activity are given below:Direct materialsDirect laborVariable manufacturing overheadFixed manufacturing overheadVariable selling expensesFixed selling expensesTotal cost per unit$ 9.5010.002.805.001.704.50$ 33.50The company's relevant range of production is 70,000 100,000 units. It believes that spending an additional $155,000 on advertising would increase unit sales by25%. What is the financial advantage (disadvantage) of spending the additional money on advertising?

Answered: Image /qna-images/answer/1e0b2318-a0cd-4263-8bd2-7800b1d72f35.jpg

Answered: Each year, a company produces and sells…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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1.) Because most equipment is not used on a project for an entire year, the costs must be converted to an hourly, weekly, or monthly cost. true or false 2.) Operation costs include tires and other wear items, fuel, lubricants and filters, and repair reserves. true or false 3.) Operating costs are those costs that are most closely related to how long a piece of equipment is owned rather than how much a piece of equipment is used. true or false Note: please help us in this sample problem and also please explain even a little bit so that we can understand it thank you
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Sturgill Manufacturing Inc. needs to predict the numbers of machines and employees required to produce its planned production for the coming year. The plant runs three shifts continuously during the workweek, for a total of 120 hours of capacity per week. The shop efficiency (the percent of total time available for production), which accounts for setups, changeovers, and maintenance, averages 70% with a standard deviation of 5%, which reduces the weekly capacity. Six key parts are produced, and the plant has three different types of machines to produce each part. The machines are not interchangeable as they each have a specific function. The time to produce each part on each machine varies. The mean time and standard deviation (in hours) to produce each part on each machine are shown below: Mean Time Part Type Machine A Machine B Machine C 1 3.5 2.6 8.9 2 3.4 2.5 8 3 1.8 3.5 12.6 4 2.4 5.8 12.5 5 4.2 4.3 28 6…
Please do not give solution in image format thanku In 2018, the government of Ghana launched operation one district one factory (IDIE). Based on IDIF, Ekumfi Pineapple Factory Co. Ltd (EPF) was launched. In 2019 the management of ERF started production with 100 workers per shift, each of the three shifts working 8 hours per day. Every working day the payroll cost was GHIC 20,000 and overhead expenses amounted to GHC 5000 and material cost GHC 4000. At the end of the first year, the company produced 1,000,000 boxes of pineapple juice. During the second year, EPF acquired a loan from Exim Bank to purchase a new plant. After the introduction of the new plant, the management reduced the size of its workers per shift to 80, each working 8 hours per day, with the payroll cost reducing to GHC 18,000 and overhead expenses also reducing to GHC 4000 and material cost rising to GHC 6000. Production rose to 1,200,000 boxes. Regard yourself as the Operations Manager of EPF: a) What are the…

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