provide answer Goldfish Enterprises' costs for selling 15,000 hours of consultancy services are $345,000 and costs for 7,000 hours are $185,000. Thecompany wishes to estimate its fixed and variable costs.a. What are the fixed and variable costs for Goldfish?b. What is the principal assumption behind your calculation?

We can use the high-low method to estimate fixed and variable costs. a) What are the fixed and…

Answered: Goldfish Enterprises' costs for selling…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 5E: Identify fixed and variable costs Intuit Inc. (INTU) develops and sells software products for the...

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Given the following, solve the independent questions using the CVP analysis. Selling Price = 30 Variable Cost per Unit = 20 Total Fixed Cost = 60,000REQUIRED: 1 Find the following functions: • Total Revenue = [TR] • Total Variable Cost = [TVC] • Total Cost = [TC] • Total Profit = [TP] 2 What is the volume of production for the business firm not to incur any profit nor loss? 3 At zero quantity of production, how much is the total cost? 4 What is the volume of production if the company wants to earn 100,000 profit?
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The quantity, Q, of a product manufactured by a company is given by Q = ak0.6L0.4, where a is a positive constant, K is the quantity of capital and L is the quantity of labor used. Capital costs are $32 per unit, labor costs are $8 per unit, and the company wants costs for capital and labor combined to be no higher than $240. Suppose you are asked to consult for the company, and learn that 6 units each of capital and labor are being used. (a) What do you advise? Should the company use more or less labor? More or less capital? If so, by how much? Enter the exact answers. The company should increase ✓labor by 6 unit(s). (b) Complete the sentence below to sell your advice to the board of directors. Round your answer to two decimal places. Reducing i unit(s) and reduce 176.63 capital by 1.5 the quantity of capital and increasing the quantity of labor will increase production by % while holding costs to $240.
Buildit Ltd has ascertained that its total costs (T) can be estimated for any level of output (O) and sales (S) according to the following equation: T = (£50 × O + £10,000) + (£20 × S + £5,000) If the production level was 500 units and sales were 400 units, what would Buildit's fixed costs be? O A. £48,000 O B. £15,000 O C. £35,000 O D. £33,000
Spruce Enterprises anticipates fixed costs of $25,000. Variable costs and expenses are expected to be 60% of sales. The president has asked you to develop a worksheet to calculate sales needed to break even and sales needed to achieve any desired net income (file name DESNI). Your worksheet should include a Data Section that contains fixed costs, desired net income, and variable costs as a percentage of sales. Assume as initial input for your model that the company wishes to achieve a net income of $10,000.
Assume that a manufacturer can purchase a needed component from a supplier at a cost of $9.50 per unit, or it can invest $60,000 in equipment and produce the item at a cost of $7.00 per unit. (a) Determine the quantity for which total costs are equal for the make and buy alternatives. (b) What is the minimum cost alternative if 15,000 units are required? What is the minimum cost? (c) If the number of units required of the component is close to trhe break even quantity, what factors might might influence the final decision to make or buy
(Please answer question 2) Management believes it can sell a new product for $8.50. The fixed costs of production are estimated to be $6,000, and the variable costs are $3.20 a unit. Complete the following table at the given levels of output and the relationships between quantity and fixed costs, quantity and variable costs, and quantity and total costs. Quantity Total Revenue Variable Costs Fixed Costs Total Costs Profits (Loss) 0 500 1,000 1,500 2,000 2,500 3,000 2. Determine the break-even level using the above table and use the following Equation to confirm the break-even level of output. PQB = FC + VQB PQB - VQB = FC QB (P-V) = FC QB = FC P-V 3. What would happen to the total revenue schedule, the total cost schedule, and the break-even level of output if…
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Alba Company is considering the introduction of a new product. To determine the selling price of this product, you have gathered the following information: • Direct material cost per unit Direct labor cost per unit • Variable manufacturing cost per unit Total fixed manufacturing costs.. • Variable selling and administration cost per unit Total fixed selling and administration costs.. .$3,000 .$2,250 ..S1,000 .S1,750,000 ..$1,250 .$550,000 If the company requires a rate of return 18% on its investments and $6,000,000 investments are needed. The total direct materials to be used in the production is $3,000,000. Required: 1. If the company uses absorption costing approach to cost-plus pricing, compute: a. The unit product cost. b. The markup percentage. c. The selling price per unit. 2. Assume that the company is considering the introduction of other new product. If the target-selling price per unit is $5,500 and the company investing $5,000,000 to purchase equipment needed produce 500…
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