If a company spends $5 million to advertise its camera lines in North America, assembles and ships 300,000 entry-level cameras and 200,000 multi-featured cameras to its North American dealers, derives revenues of $100 million from its sales of entry-level cameras and $150 million from the sales of its multi- featured cameras in North America, then: a). 50% of the $5 million in advertising expenditures in North America will be allocated to the costs of advertising for entry-level cameras and 50% will be allocated to the costs of multi-featured cameras. b). 60% of the $5 million in advertising expenditures in North America will be allocated to the costs of advertising for entry-level cameras and 40% will be allocated to the costs of multi-featured cameras. c). the per camera advertising costs for both entry-level and multi-featured cameras in North America will be $7.50. d). 40% of the $5 million in advertising expenditures in North America will be allocated to the costs of advertising for entry-level cameras and 60% will be allocated to the costs of multi-featured cameras. e). None of the above.

If a company spends $5 million to advertise its camera lines in North America, assembles and ships 300,000 entry-level cameras and 200,000 multi-featured cameras to its North American dealers, derives revenues of $100 million from its sales of entry-level cameras and $150 million from the sales of its multi- featured cameras in North America, then: a). 50% of the $5 million in advertising expenditures in North America will be allocated to the costs of advertising for entry-level cameras and 50% will be allocated to the costs of multi-featured cameras. b). 60% of the $5 million in advertising expenditures in North America will be allocated to the costs of advertising for entry-level cameras and 40% will be allocated to the costs of multi-featured cameras. c). the per camera advertising costs for both entry-level and multi-featured cameras in North America will be $7.50. d). 40% of the $5 million in advertising expenditures in North America will be allocated to the costs of advertising for entry-level cameras and 60% will be allocated to the costs of multi-featured cameras. e). None of the above.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter17: Activity Resource Usage Model And Tactical Decision Making

Section: Chapter Questions

Problem 14E: Global Reach, Inc., is considering opening a new warehouse to serve the Southwest region. Darnell...

See similar textbooks

Similar questions

i need the answer quickly
Compute the annual pretax operating income, in U.S. dollars, of each division under the following transfer-pricing methods: (a) 150% of full cost and (b) market price
Engco, a U.S. corporation, produces industrial engines at its U.S. plant for sale in the United States and Canada. During the current year, Engco's total sales to Canadian customers are $10 million and the related cost of goods sold is $7 million. Title passes in Canada on all engine sales to Canadian customersa. How much of Engco's export gross profit of $3 million (export sales of $10 million less$7 million cost of goods sold) is classified as foreign-source tor U.S. tax purposes?b. Now assume that the facts are the same as in part (a), except that EngCo is a distributor that purchases the ensines trom indevendent third parties tor sale to customers in both the United States and Canada. How much of Engco's export gross profit of $3 million from Canadian sales is classitied as foreign-source tor U.S. tax purposes?
(Question 3) Finder Health Corp is one of the biggest companies in the United States with the market capital $69.2 billion. It also operated in Singapore and United Kingdom. Below are the details of the transactions for Finder Health Corp throughout the year: i. The total sales produced for each countries is 900,000 units. United States produce 500 000 units with USD25 per unit, 200000 units is from Singapore at SGD18 and the remaining balance is from United Kingdom at GBP30 per unit. ii. In order to reduce the cost of production, Finder Health Corp import the cost of material which imported from United Kingdom is 400000 unit at GBP15 per unit. The balance was incurred in Singapore where the cost of material is SGD15 per unit. iii. Fixed costs is USD 950000 and variable operating expenses represent approximately 10 percent of each from United States and only United Kingdom which out of their sales. iv. Interest expense is estimated at SGD 75000 on Singapore loans only. v. The exchange…
Global Reach, Inc., is considering opening a new warehouse to serve the Southwest region. Darnell Moore, controller for Global Reach, has been reading about the advantages of foreign trade zones. He wonders if locating in one would be of benefit to his company, which imports about 90 percent of its merchandise (e.g., chess sets from the Philippines, jewelry from Thailand, pottery from Mexico, etc.). Darnell estimates that the new warehouse will store imported merchandise costing about 16.78 million per year. Inventory shrinkage at the warehouse (due to breakage and mishandling) is about 8 percent of the total. The average tariff rate on these imports is 5.5 percent. Required: 1. If Global Reach locates the warehouse in a foreign trade zone, how much will be saved in tariffs? Why? (Round your answer to the nearest dollar.) 2. Suppose that, on average, the merchandise stays in a Global Reach warehouse for nine months before shipment to retailers. Carrying cost for Global Reach is 6 percent per year. If Global Reach locates the warehouse in a foreign trade zone, how much will be saved in carrying costs? What will the total tariff-related savings be? (Round your answers to the nearest dollar.) 3. Suppose that the shifting economic situation leads to a new tariff rate of 13 percent, and a new carrying cost of 6.5 percent per year. To combat these increases, Global Reach has instituted a total quality program emphasizing reducing shrinkage. The new shrinkage rate is 7 percent. Given this new information, if Global Reach locates the warehouse in a foreign trade zone, how much will be saved in carrying costs? What will the total tariff-related savings be? (Round your answers to the nearest dollar.)
Schulz GmbH, a German company, set an 18 percent target rate of return for its U.S. division for the year. The U.S. division generated $85,800,000 of annual revenue on average assets of $55,000,000. The division’s variable costs were 45 percent of sales, and fixed costs were $6,750,000. Compute the following items for the U.S. division: a. ROI ______% b. Residual income: $______ c. Profit margin ______% d. Asset turnover ______
Embraer of Brazil is one of the two leading global manufacturers of regional jets (Bombbardler of Canada is the other). Regional jets are smaller than the traditional civilian airliners produced by Airbus and Boeing, seating between 50 and 100 people on average. Embraer has concluded an agreement with a regional U S airline to produce and deliver four aircraft one year from now for $78 Million. Although Embraer will be paid in U.S. Dollars. It also possesses a currency exposure of inputs- it must pay foreign suppliers $15 million for inputsone year from now (but they will be delivering the subcomponents throughtout the year). The cuurent spot rate on the Brazilian real (R$) is R$1.87/$, but it has been steadily appreciating against the US dollar over the past three years. Forward contracts are difficult to acquire and are considered expensive. Citibank Brasil has not explicity provided Embraer a forward rate quote, but has stated that it will probably be pricing a forward off the…
Embraer of Brazil. Embraer of Brazil is one of the two leading global manufacturers of regional jets. (Bombardier of Canada is the other.) Regional jets are smaller than the traditional civilian airliners produced by Airbus and Boeing, seating between 50 and 100 people on average. Embraer has concluded an agreement with a regional U.S. airline to produce and deliver four aircraft one year from now for USD80 million. Although Embraer will be paid in U.S. dollars, it also possesses a currency exposure of inputs—it must pay foreign suppliers USD20 million for inputs one year from now (but they will be delivering the subcomponents throughout the year). The current spot rate on the Brazilian real (BRL) is BRL1.8240 = USD1.00, but it has been steadily appreciating against the U.S. dollar over the past three years. Forward contracts are difficult to acquire and are considered expensive. Citibank Brasil has not explicitly provided Embraer a forward rate quote but has stated that it will…
Due to rising labor costs in Malaysia, Domain Computer, based in Singapore, is considering shorting part of its production facilities from Malaysia to an emerging market, Vietnam, to better integrate its supply chain in the South east Asia region. John Lawson, the CFO of the company, estimates that Domain Computer needs to invest USD735,000 to acquire an existing factory in Vietnam and another USD285,000 in renovations and installation of new machineries. The cost of training new workers is estimated to be USD310,000. Andrew believes that the new factory will lead to an estimated USD928,000 savings in labor costs and another USD417,000 savings in logistics expenses. Required: Use cost-benefit analysis to recommend whether Domain Computer should shift parts of its production facilities from Malaysia to Vietnam. Explain your answer.
Subject:- General Account
EuroPottery Gmbh of Munich has two divisions, Earthenware Products Division and Stoneware Products Division. The segmented income statement for the most recent quarter is illustrated below. All currency amounts are in Euros (€). Treat each question independently: Determine the breakeven point for the Earthenware Division. Determine the breakeven point of the Stoneware Division. Next month the Earthenware division is anticipating increases in variable costs of €0.75 per unit and an increase in direct fixed costs of €2,000. If, instead of increasing the volume we increase the price of the product, what price must we set to achieve the target divisional controllable margin of €51,000? Euro Pottery is considering modernizing the Stoneware division. The firm has the opportunity to purchase some automated equipment that is estimated to save €1.50 per unit in variable costs but would result in higher fixed costs. Assuming no change in sales volume, determine the target fixed costs that…
i need the answer quickly