● ● ● Example 4 Product Emphasis Decisions AMD AMD manufactures two main families of microprocessor or chips: (1) microprocessors for personal computers; (2) microprocessor for Mainframes At present, AMD sells 100,000 microprocessors for PCs and 80,000 processors for mainframes. The selling price and per unit variable cost per each products is as follow: PC Mainframes Selling price Direct materials $ 100 $ 10 Direct mfg. labor $7 Variable mfg. overhead $ 3 $ 200 $ 25 AMDD $ 15 $ 10 Assuming there are no resource constraints which product line should be emphasized?

● ● ● Example 4 Product Emphasis Decisions AMD AMD manufactures two main families of microprocessor or chips: (1) microprocessors for personal computers; (2) microprocessor for Mainframes At present, AMD sells 100,000 microprocessors for PCs and 80,000 processors for mainframes. The selling price and per unit variable cost per each products is as follow: PC Mainframes Selling price Direct materials $ 100 $ 10 Direct mfg. labor $7 Variable mfg. overhead $ 3 $ 200 $ 25 AMDD $ 15 $ 10 Assuming there are no resource constraints which product line should be emphasized?

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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Oriental Furnitures makes three types of quality wooden furniture. Information for these three products are shown below: A1 A2 A3 Total Selling price per unit $200 $500 $1 000 Variable cost per unit $60 $250 $600 Expected unit sales (annual) 15,000 7,000 2,000 24,000 Sales mix 60 percent 30 percent 10 percent 100 percent Total annual fixed costs are $4,000,000. Assume the sales mix remains the same at all levels of sales. Required: SHOW YOUR WORKINGS FOR ALL SECTIONS Calculate the weighted average unit contribution margin, assuming a constant sales mix.
Question 6 Amundsen Company makes 60,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct Materials Direct Labor Variable Manufacturing Overhead Fixed Manufacturing Overhead Variable Selling Fixed Selling Total $ 10.10 $17.40 $ 2.70 $15.00 $ 2.75 $ 3.25 $51.20 An outside supplier has offered to sell the company all of these parts it needs. If the company accepts this offer, the facilities now being used to make the part would be idle and fixed manufacturing overhead would be reduced by 80% of current cost. The variable selling costs would be reduced to 40% of current cost. Required: What is the maximum amount the company should be willing to pay an outside supplier per unit for the part?
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CVP Analysis of Multiple Products Alo Company produces commercial printers. One is the regular model, a basic model that is designed to copy and print in black and white. Another model, the deluxe model, is a color printer-scanner-copier. For the coming year, Alo expects to sell 100,000 regular models and 20,000 deluxe models. A segmented income statement for the two products is as follows: Regular Model Deluxe Model Total Sales $16,000,000 $13,400,000 $29,400,000 Less: Variable costs 9,600,000 8,040,000 17,640,000 Contribution margin $6,400,000 $5,360,000 $11,760,000 Less: Direct fixed costs 1,200,000 960,000 2,160,000 Segment margin $5,200,000 $4,400,000 $9,600,000 Less: Common fixed costs 1,720,800 Operating income $7,879,200 Required: 1. Compute the number of regular models and deluxe models that must be sold to break even. Round your answers to the nearest whole…