Tool Industries manufactures large workbenches for industrial use. Sam Hartnet, the Vice President for marketing at Tool Industries, concluded from market analysis that sales were dwindling for Tool's workbenches due to aggressive pricing by competitors. Tool's workbench sells for $2,040 whereas the competition's comparable workbench sells for $1,780. Sam determined that a price drop to $1,780 would be necessary to protect its market share and maintain an annual sales level of 14,800 workbenches. Cost data based on sales of 14,800 workbenches: Budgeted Quantity Actual Quantity Actual Cost Direct materials (pounds) 184,000 177,000 $ 3,459,000 Direct labor (hours) 76,400 76,000 829,500 Machine setups (number of setups) 1,800 1,240 259,000 Mechanical assembly (machine hours) 33,600 285,750 3,768,000 The current cost per unit is (rounded to the nearest whole dollar): Multiple Choice $448. $390. $513. $562. $370.
Tool Industries manufactures large workbenches for industrial use. Sam Hartnet, the Vice President for marketing at Tool Industries, concluded from market analysis that sales were dwindling for Tool's workbenches due to aggressive pricing by competitors. Tool's workbench sells for $2,040 whereas the competition's comparable workbench sells for $1,780. Sam determined that a price drop to $1,780 would be necessary to protect its market share and maintain an annual sales level of 14,800 workbenches. Cost data based on sales of 14,800 workbenches: Budgeted Quantity Actual Quantity Actual Cost Direct materials (pounds) 184,000 177,000 $ 3,459,000 Direct labor (hours) 76,400 76,000 829,500 Machine setups (number of setups) 1,800 1,240 259,000 Mechanical assembly (machine hours) 33,600 285,750 3,768,000 The current cost per unit is (rounded to the nearest whole dollar): Multiple Choice $448. $390. $513. $562. $370.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Q2
Tool Industries manufactures large workbenches for industrial use. Sam Hartnet, the Vice President for marketing at Tool Industries, concluded from market analysis that sales were dwindling for Tool's workbenches due to aggressive pricing by competitors. Tool's workbench sells for $2,040 whereas the competition's comparable workbench sells for $1,780. Sam determined that a price drop to $1,780 would be necessary to protect its market share and maintain an annual sales level of 14,800 workbenches.
Cost data based on sales of 14,800 workbenches:
| Budgeted Quantity | Actual Quantity | Actual Cost | |
|---|---|---|---|
| Direct materials (pounds) | 184,000 | 177,000 | $ 3,459,000 |
| Direct labor (hours) | 76,400 | 76,000 | 829,500 |
| Machine setups (number of setups) | 1,800 | 1,240 | 259,000 |
| Mechanical assembly (machine hours) | 33,600 | 285,750 | 3,768,000 |
The current cost per unit is (rounded to the nearest whole dollar):
Multiple Choice
-
$448.
-
$390.
-
$513.
-
$562.
-
$370.
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