Financial Accounting Zenith Corporation has a high probability of operating at 50,000 activity hoursduring the upcoming period, and lower probabilities of operating at 40,000 hoursand 60,000 hours. The company's flexible budget revealed the following:Activity Hours Variable Costs Fixed Costs40,000 Hours$260,00050,000 Hours$325,00060,000 Hours$390,000$950,000$950,000$950,000If Zenith operated at 45,000 activity hours, determine its total budgeted cost.

Step 1: Define Flexible BudgetA flexible budget is a budget that adjusts for changes in the level of…

Answered: Zenith Corporation has a high…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 40P

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Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead costs per month include supervision of 98,000, depreciation of 76,000, and other overhead of 245,000. Required: 1. Prepare a flexible budget for all costs of production for the following levels of production: 160,000 units, 170,000 units, and 175,000 units. 2. What is the per-unit total product cost for each of the production levels from Requirement 1? (Round each unit cost to the nearest cent.) 3. What if Nashler Companys cost of maintenance rose to 0.22 per unit? How would that affect the unit product costs calculated in Requirement 2?
Suppose that a company is spending 60,000 per year for inspecting, 30,000 for purchasing, and 40,000 for reworking products. A good estimate of nonvalue-added costs would be a. 70,000. b. 130,000. c. 40,000. d. 90,000. e. 100,000.
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According to its original plan, Benson Consulting Services Company plans to charge its customers for service at $132 per hour. The company president expects consulting services provided to customers to reach 46,000 hours at that rate. The marketing manager, however, argues that actual results may range from 42,000 hours to 50,000 hours because of market uncertainty. Benson's standard variable cost is $40 per hour, and its standard fixed cost is $1,410,000. Required Develop flexible budgets based on the assumptions of service levels at 42,000 hours, 46,000 hours, and 50,000 hours. Flexible Budget Flexible Budget Flexible Budget 46,000 Hours 42,000 Hours 50,000 Hours
According to its original plan, Munoz Consulting Services Company plans to charge its customers for service at $125 per hour. The company president expects consulting services provided to customers to reach 55,000 hours at that rate. The marketing manager, however, argues that actual results may range from 49,000 hours to 61,000 hours because of market uncertainty. Munoz's standard variable cost is $46 per hour, and its standard fixed cost is $1,410,000. Required Develop flexible budgets based on the assumptions of service levels at 49,000 hours, 55,000 hours, and 61,000 hours.
A company’s flexible budget for 16,000 units of production showed sales, $96,000; variable costs, $56,000; and fixed costs,$20,000. What are the sales expected if the company produces and sells 20,000 units?
Based on a predicted level of production and sales of 22,000 units, a company anticipates total variable costs of $99,000, fixed costs of $30,000, and operating income of $36,000. Based on this information, the budgeted amount of sales for 20,000 units would be: O $165,000. O $141,900. O $150,000. O $181.500. O $117.272.
Clark Inc plans to sell 9000 lawn chairs during May, 9700 in June, and 7000 during July. The company keeps 15% of the next month's sales as ending inventory. How many units should Clark produce during June? 10105 9295 Not enough information to determine 10750
Brodrick Company expects to produce 21,700 units for the year ending December 31. A flexible budget for 21,700 units of production reflects sales of $542,500; variable costs of $65,100; and fixed costs of $143,000. If the company instead expects to produce and sell 27,300 units for the year, calculate the expected level of income from operations.
During the current year, Cullumber Corporation expects to produce 10,000 units and has budgeted the following: net income $350,000; variable costs $1,290,000; and fixed costs $110,000. It has invested assets of $1,650,000. What was the company's budgeted ROI? What was its budgeted markup percentage using a total cost approach? Budgeted ROI per unit Budgeted markup percentage $ %
Rockets and More Ltd. Is concerned about the uncertain nature of its market for the upcoming year and has prepared budgeted results on 90%, 100% and 105% activity as follows: Output Revenue Less: Materials 337,500 Labour Costs 440,000 Production overhead costs 217,500 Administrative Costs 120,000 Selling and distribution cost 70,000 1,185,000 Revenue Less: Expenses Materials costs Labour costs Prod. Overhead costs Administration costs Selling and distribution costs Net profit 90% 45,000 Required: A. $ 1,350,000 Net Profit 165,000 200,000 Only 37,500 units have been sold with the following results: S B. 100% 50,000 S 1,500,000 375,000 485,000 235,000 130,000 75,000 1,300,000 311,750 351,500 171,250 117,500 66,500 105% 52, 500 $ 1,575,000 393,750 507,500 243,750 135,000 77,500 1,357,500 217,500 $ 1,075,000 1,018,500 56,500 i. The budgeted selling price is $30 per unit ii. All production is sold iii. The fixed element of the budgeted costs will remain unchanged at all levels of production…
Carousel Co. has prepared the following budget data: Sales, 150,000 units; selling price per unit, P25.00; variable cost per unit, P15.00; fixed costs and expenses, P1,300,000. An advertising agency claims that an aggressive advertising campaign would enable the company to increase its unit sales by 20%. What is the maximum amount that the company can pay for advertising and obtain a net operating income of P300,000?

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