Mabuhay Corporation manufactures special types of furniture and fixtures for the use of luxury hotels in the country. It buys raw materials every 5th day of the month for ₱ 1,000,000. The suppliers of raw materials provide only 30-day credit terms to Mabuhay Corporation. It takes 90 days to convert the raw materials into finished products. Once the products are finished, Mabuhay sells them to luxury hotels on account. The buyers are given 30 days to settle their account. What is the conversion cycle of Mabuhay Corporation?
Mabuhay Corporation manufactures special types of furniture and fixtures for the use of luxury hotels in the country. It buys raw materials every 5th day of the month for ₱ 1,000,000. The suppliers of raw materials provide only 30-day credit terms to Mabuhay Corporation. It takes 90 days to convert the raw materials into finished products. Once the products are finished, Mabuhay sells them to luxury hotels on account. The buyers are given 30 days to settle their account. What is the conversion cycle of Mabuhay Corporation?
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 6E: Elliott, Inc., has four salaried clerks to process purchase orders. Each clerk is paid a salary of...
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Mabuhay Corporation manufactures special types of furniture and fixtures for the use of luxury hotels in the country. It buys raw materials every 5th day of the month for ₱ 1,000,000. The suppliers of raw materials provide only 30-day credit terms to Mabuhay Corporation. It takes 90 days to convert the raw materials into finished products. Once the products are finished, Mabuhay sells them to luxury hotels on account. The buyers are given 30 days to settle their account. What is the conversion cycle of Mabuhay Corporation?
Use this formula:
Unit Product Cost = fixed cost + variable cost/ expected unit sales
Mark Up Price = Unit Product Cost/ Desired Return on Sale
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