Lee Lighting produces two models of floor lamps: Standard and Smart. The two differ primarily in the quality of the materials and theadditional electronics required for the Smart lamp. At budget, Standard sells for $18 per unit and has a variable cost to produce of $12.The Smart lamp sells for a budgeted $64 per lamp and has a budgeted variable cost to produce of $46. Lee expects to sell 40 percentSmart lamps, and budgeted sales at a total of 98,000 lamps of both models for May. Lee actually sold 94,000 lamps, of which 39,500were Smart lamps. Smart lamp actual revenues represented 40 percent of May total actual revenue.Required:a. Compute the sales activity variance for Lee for May.b. Compute the sales mix and sales quantity variances for May.Complete this question by entering your answers in the tabs below.Required ARequired BCompute the sales activity variance for Lee for May.Note: Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" forunfavorable. If there is no effect, do not select either option.Activity varianceU

Step 2: Calculate Actual Sales for Each Lamp Type (using actual units sold and given percentage for…

Answered: Lee Lighting produces two models of…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 5EA: Shelby Industries has a capacity to produce 45.000 oak shelves per year and is currently selling...

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Gonzales Corp. needs to set a target price for its newly designed product EverReady. The following data relate to this product. Per Unit Total Direct Material $20 Direct Labor $40 Variable manufacturing Overhead $10 Fixed manufacturing overhead $1,200,000 Variable selling and administrative $5 Fixed selling and administrative $1,120,000 The costs shown above are based on a budgeted volume of 80,000 units produced and sold each year. Gonzales uses cost-plus pricing methods to set its target selling price. Because some managers prefer absorption-cost pricing and others prefer variable-cost pricing, the accounting department provides information under both approaches using a markup of 50% on absorption cost and a markup of 70% on variable cost.…
Gonzales Corp. needs to set a target price for its newly designed product EverReady. The following data relate to this product. Per Unit Total Direct Material $20 Direct Labor $40 Variable manufacturing Overhead $10 Fixed manufacturing overhead $1,200,000 Variable selling and administrative $5 Fixed selling and administrative $1,120,000 The costs shown above are based on a budgeted volume of 80,000 units produced and sold each year. Gonzales uses cost-plus pricing methods to set its target selling price. Because some managers prefer absorption-cost pricing and others prefer variable-cost pricing, the accounting department provides information under both approaches using a markup of 50% on absorption cost and a markup of 70% on variable cost.…
Finch Company is considering the addition of a new product to its cosmetics line. The company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. Relevant information and budgeted annual income statements for each of the products follow. Budgeted sales in units (a) Expected sales price (b) Variable costs per unit (c) Income statements Sales revenue (a × b) Variable costs (a × c) Contribution margin Fixed costs Net income Req A Req B Margin of safety Req C1 Skin Cream 112,000 Skin Cream Relevant Information Required: a. Determine the margin of safety as a percentage for each product. b. Prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume. c1. For each product, determine the percentage change in net income that results from the 20 percent increase in sales. c2. Which product has the highest operating leverage? d. Assuming that management is pessimistic and risk averse, which product should…
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yntech makes digital cameras for drones. Their basic digital camera uses $80 in variable costs and requires $1,600 per month in fixed costs. Syntech sells 100 cameras per month. If they process the camera further to enhance its functionality, it will require an additional $50 per unit of variable costs, plus an increase in fixed costs of $1,200 per month. The current price of the camera is $170. The marketing manager is positive that they can sell more and charge a higher price for the improved version. At what price level would the upgraded camera begin to improve operational earnings?
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Mortech makes digital cameras for drones. Their basic digital camera uses $80 in variable costs and requires $1,500 per month in fixed costs. Mortech sells 200 cameras per month. If they process the camera further to enhance its functionality, it will require an additional $45 per unit of variable costs, plus an increase in fixed costs of $1,000 per month. The current price of the camera is $200. The marketing manager is positive that they can sell the same amount and charge a higher price for the improved version. At what price level would the upgraded camera begin to improve operational earnings?
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Waterways is thinking of mass-producing one of its special-order sprinklers. To do so would increase unit variable costs for all sprinklers by an average of $0.60. The company also estimates that this change could increase the overall number of sprinklers sold by 10%, and the average unit sales price would increase $0.20. Waterways currently sells 489,000 sprinkler units at an average unit selling price of $28.20. The manufacturing costs are $8,393,890 variable and $1,283,761 fixed. Selling and administrative costs are $2,637,950 variable and $800,440 fixed. If the average unit sales price per sprinkler did not increase when the company began mass-producing the special-order sprinkler, what would be the effect on the company? (Round ratio answer to O decimal places, e.g. 5% and profit answer to 2 decimal places, e.g. 5,275.25.) Contribution margin ratio Profit by by LA $ %
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