Kimberly wants to use her knitting skills to make a little extra money so she can enjoy a theatre weekend with her besties. She's got thepattern down for a hat, scarf, and mittens, but she realizes that her available time is limited. She should be able to sell as many of anyitem as she can make (they all sell for $14), but she wants to make sure she's making the best use of her time. See below for cost andtime information.Time (minutes)Cost of yarn (per unit)HatScarf20$5 $730MittensContribution margin per minute $40$3Calculate the contribution margin per unit of the scarce resource for each item. (Round answers to 2 decimal places, e.g. 15.25.)Hat$ScarfWhich item should Kimberly focus on in order to maximize her profitability and resources?$Mittens

The contribution margin is calculated as difference between sales and variable costs. The product…

Answered: Kimberly wants to use her knitting…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Karen has been working with a small travel agency for the past few years to learn the business and to better understand what costs are necessary to run it. Now, having been in the business world for a few years, she's ready to start her own travel agency, specializing in "off the grid" locations. She knows there will be both overhead costs and labor costs, since she intends to hire one assistant. The following chart outlines her estimates thus far. Annual net operating cash flowsa Initial asset investment Asset life in years Salvage value of asset at end of useful life Tax rate (a) $3,800 $9,800 NPV $ 8 *After assistant and overhead costs, but does not include a salary for Karen. As a new business owner, Karen only expects to earn a 5% rate of return. She conducted an initial NPV anlaysis for an 8-year interval, recognizing that she'll make some significant adjustments after that point. Her initial analysis revealed a positive NPV. Click here to view the factor table Karen's…
Walter is a used car dealer. He has the chance to buy a used car that he thinks he can resell for $6,400. If Walter needs a 30% markup on selling price, what price can he pay? View keyboard shortcuts
Mike is considering setting up a business manufacturing custom bicycle frames. He is a keen cyclist and has many contacts with managers of local bicycle shops who could send business his way. He has found a unit to rent and worked out some preliminary estimates of costs he would have to incur. The firm will manufacture frames made from either aluminium alloy or carbon fibre. Mike's analysis tells you that because aluminium is cheaper and easier to work with each aluminium frame would have a direct materials cost of £100 and direct labour cost of £40. Carbon fibre frames are expected to have a direct materials cost of £200 and direct labour cost of £60. Irrespective of which type of frame is produced, the business will also incur the following annual fixed costs: Rent £12,500 £2,000 Machinery maintenance Spare parts Heat, light, electricity, and water Quality control £500 £4,000 £2,500 The annual machine hours are budgeted to be 1,000 hours. Mi estimates that a single carbon fibre frame…
For Lisa, one of the most exciting aspects of landing a full-time job was being able to buy a different car! Even though she will be working in an urban area, she will need a reliable vehicle to travel to client locations outside the city. Lisa is trying to decide if she should buy a new vehicle or a slightly used vehicle, or lease a new(er) vehicle. She has had her eye on a dazzling blue SUV; it stares at her every time she drives by the lot. But she's not sure if she can justify its cost. Here are the costs and benefits she has gathered for each of these options: Monthly payment Time frame Warranty Full coverage insurance Operating cost Expected mileage per year Safety features $490 Buy New 6 years Excellent for 100,000 miles $190 per month $0.20 per mile 13,200 Maximum $380 Buy Used 4 years Excellent for next 40,000 miles only $160 per month $0.20 per mile 13,200 Moderate Lease Midnight-Blue SUV $300 plus $2 per mile if over 10,000 miles per year 2 years Excellent for length of…
Fatma has always loved to cook and is interested in starting a catering business. Being aware of the failure rate of new businesses, she is considering buying an existing catering business, Tasty Caterers that is up for sale. The Tasty Caterers claim that the business is highly profitable, but Fatma has her doubts. She wonders why the owners of Tasty Caterers would be so interested in selling the business if it is such a money-maker. Furthermore, the price that they are asking seems high to Fatma. Without any formal training in accounting, Fatma asks a friend, Rawan, for advice. Q) If Fatma decides to purchase Tasty Caterers, what plans do you think she must have in place? Give specific examples of each of the three types of planning with regard to Fatma's business.
For Maria, one of the most exciting aspects of landing a full-time job was being able to buy a different car! Even though she will be working in an urban area, she will need a reliable vehicle to travel to client locations outside the city. Maria is trying to decide if she should buy a new vehicle or a slightly used vehicle, or lease a new(er) vehicle. She has had her eye on a dazzling blue SUV; it stares at her every time she drives by the lot. But she's not sure if she can justify its cost. Here are the costs and benefits she has gathered for each of these options: Monthly payment Time frame Warranty Full coverage insurance Operating cost Expected mileage per year Safety features $510 Buy New 6 years Excellent for 100,000 miles $210 per month $0.20 per mile 13,800 Maximum $370 4 years Excellent for next 40,000 miles only $145 per month $0.20 per mile 13,800 Buy Used Moderate Lease Midnight-Blue SUV $290 plus $2 per mile if over 10,000 miles per year 2 years Excellent for length of…
Don is using the floor plans for his new home to help him purchas base molding for the place where the walls meet the floor. The plans are drawn using a scale in which 1/3 inch represents 1 foot. He measures the walls on the floor plan with a ruler and finds they total 24 inches. If the molding costs $3.12 per foot, how much will Don spend on molding?
I need help. These are the two formulas required to solve the problem about the skateboard shop
Hanshaben
Sandra owns a small manufacturing company, Tamarisk Camping Stuff Co. The company has been working to perfect a lightweight plastic material to be used for a variety of camping products. Sandra plans to enter the marketplace with a durable, lightweight folding table. Similar tables regularly sell for $39-$44 for a 6-foot table, so Sandra realizes that she'll have to stay within that range. She believes her table could sell on the higher end of this range, however, so she is using a target selling price of $44 for planning purposes. Sandra needs to generate an ROI of at least 20% on her invested assets to make this worthwhile in the long term. Her invested assets are $800,000, and she expects to sell 5,000 tables in her first year of activity. (a) Calculate the target cost for one table. Target cost for one table $ (b1) eTextbook and Media Text 12 Attempts: 1 of 1 used If the SG&A portion of that unit cost is estimated to be $7, how much does that leave for the product cost per unit?…
Nicolas has purchased a streaming audio service for $8.00 per month. As he listens to more songs in a month he spread this fixed cost over a larger number of songs, and therefore his cost per song decreases the more songs he listens to. One if his friends says to Nicolas: “The more music you listen to, the less you pay per song so you should spend all your time listening to music.” Please explain what is wrong with the friend’s statement.
Chris is a financial manager for a small business. Right now, he's working on next year's budget. Money is tight, and each department has requested more money than Chris is able to budget for it. His best friend works in marketing and is pressuring Chris for an extra $5,000.00 for her advertising budget. Chris doesn't want to disappoint her but granting her the favor would mean taking money away from other departments. The decision is up to him, and his boss will trust his judgment. What should Chris do? Is it all right to let a personal relationship influence his budgeting decisions?

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS