SalesVariable costsFixed costs$3,608,000902,0002,250,000Houston-based Advanced Electronics manufactures audio speakers for desktop computers. The following data relate to the periodjust ended when the company produced and sold 44,000 speaker sets:Management is considering relocating its manufacturing facilities to northern Mexico to reduce costs. Variable costs are expected toaverage $16.00 per set; annual fixed costs are anticipated to be $1,986,000. (In the following requirements, ignore income taxes.)Required:1. Calculate the company's current income and determine the level of dollar sales needed to double that figure, assuming thatmanufacturing operations remain in the United States.2. Determine the break-even point in speaker sets if operations are shifted to Mexico.3. Assume that management desires to achieve the Mexican break-even point; however, operations will remain in the United States.a. If variable costs remain constant, by how much must fixed costs change?b. If fixed costs remain constant, by how much must unit variable cost change?4. Determine the impact (increase, decrease, or no effect) of the following operating changes.E

Analysis of Houston-Based Advanced Electronics1. Current Income and Sales for Double Income (US…

Answered: Sales Variable costs Fixed costs…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Sell or Process Further Jensen Manufacturing Company makes a partially completed assembly unit that it sells for $36 per unit. Normally, 42,000 units are sold each year. Variable unit cost data on the assembly are as follows: Direct material $10 Direct labor 8 Variable manufacturing overhead 4 The company is now using only 70% of its normal capacity; it could fully use its normal capacity by processing the assembly further and selling it for $41 per unit. If the company does this, material and labor costs will each increase by $2 per unit and variable overhead will go up by $1 per unit. Fixed costs will increase from the current level of $160,000 to $180,000. Prepare an analysis showing whether Jensen should process the assemblies further. Use a negative sign with answer to only indicate a loss from processing assemblies further; otherwise do not use negative signs with your answers. Sell of Process Further Differential Analysis $ Differential revenue Differential costs Direct material…
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Required information [The following information applies to the questions displayed below.] Data for Hermann Corporation are shown below: Selling price Variable expenses Contribution margin Per Unit $ 70 49 $ 21 Fixed expenses are $74,000 per month and the company is selling 4,400 units per month. Req 2A 2-a. Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher-quality components that increase the variable expense by $4 per unit and increase unit sales by 25%. 2-b. Should the higher-quality components be used? Req 2B Percent of Sales Complete this question by entering your answers in the tabs below. 100% 70 30% by Refer to the original data. How much will net operating income increase (decrease) per month if the company uses higher- quality components that increase the variable expense by $4 per unit and increase unit sales by 25%. Net operating income
Houston-based Advanced Electronics manufactures audio speakers for desktop computers. The following data relate to the period just ended when the company produced and sold 42,000 speaker sets: Sales $ 3,528,000 Variable costs 882,000 Fixed costs 2,310,000 Management is considering relocating its manufacturing facilities to northern Mexico to reduce costs. Variable costs are expected to average $18.00 per set; annual fixed costs are anticipated to be $1,988,000. (In the following requirements, ignore income taxes.) Required:1. Calculate the company’s current income and determine the level of dollar sales needed to double that figure, assuming that manufacturing operations remain in the United States.2. Determine the break-even point in speaker sets if operations are shifted to Mexico.3. Assume that management desires to achieve the Mexican break-even point; however, operations will remain in the United States.a. If variable costs remain constant, by…
Relevant range and fixed and variable costsVogel Inc. manufactures memory chips for electronic toys within a relevant range of 45,000 to 75,000 memory chips per year. Within this range, the following partially completed Manufacturing cost schedule has been prepared
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Comfort Ride manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year, but currently produces and sells 75,000 seats per year. The following informatio relates to current production of seats: Sale price per unit Variable costs per unit: Manufacturing $400 $230 Marketing and administrative $60 Total fixed costs: Manufacturing $790,000 Marketing and administrative $210,000 A. Increase by $49,000 B. Increase by $60,000 OC. Decrease by $49,000 OD. Increase by $229,000
Cabin Creek Company is considering adding a new line of kitchen cabinets. The company's accountant provided the following estimated data for these cabinets: Annual sales Selling price per unit Variable manufacturing costs per unit Variable selling costs per unit Incremental fixed costs per year: 800 units. $ 3,680 $ 1,680 $ 530 $ 493,400 Manufacturing Selling Allocated common costs per year: Manufacturing Selling and administrative $ 73,000 $ 98,000 $ 130,000 If the kitchen cabinets are added as a new product line, the company expects that the contribution margin earned from selling products will decrease by $236,000 per year. Required: 1. What is the annual financial advantage (disadvantage) of adding the new line of kitchen cabinets? 2. What is the lowest selling price per unit that could be charged for the cabinets and still make it economically desirable for th company to add the new product line? Complete this question by entering your answers in the tabs below. Required 1…
Lamar has the following data: Selling price $ 40 Variable manufacturing cost $ 22 Fixed manufacturing cost $ 165,000 per month Variable selling & administrative costs $ 6 Fixed selling & administrative costs $ 135,000 per month How many units must Lamar produce and sell in order to break-even?
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The following are data on three promissory notes. Determine the missing amounts. (Round answers to O decimal places, e.g. 5,275. Use 360 days for calculation.) Date of Note Terms Maturity Date Principal (a) April 1 60 days May 31 $842,400 (b) July 2 30 days August 1 100,800 (c) March 7 6 months September 7 129,600 Annual Interest Rate 5 % $ Total Interest 6 ୫୫ 252,720 $504 10 % $ 2,365,200

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