Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 6, Problem 6.21E
Sales budget, service setting. In 2017 Hart & Sons, a small environmental-testing firm, performed 11,400 radon tests for $260 each and 15,000 lead tests for $210 each. Because newer homes are being built with lead-free pipes, lead-testing volume is expected to decrease by 12% next year. However, awareness of radon-related health hazards is expected to result in a 5% increase in radon-test volume each year in the near future. Jim Hart feels that if he lowers his price for lead testing to $200 per test, he will have to face only a 4% decline in lead-test sales in 2018.
- 1. Prepare a 2018 sales budget for Hart & Sons assuming that Hart holds prices at 2017 levels.
- 2. Prepare a 2018 sales budget for Hart & Sons assuming that Hart lowers the price of a lead test to $200. Should Hart lower the price of a lead test in 2018 if the company’s goal is to maximize sales revenue?
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In 2017, Cole & Sons, a small environmental-testing firm, performed 11,200 radon tests for $290 each and 15,800 lead tests for $240 each. Because newer homes are being built with lead-free pipes, lead-testing volume is expected to decrease by 12% next year. However, awareness of radon-related health hazards is expected to result in a 4% increase in radon-test volume each year in the near future. Jim Cole feels that if he lowers his price for lead testing to $230 per test, he will have to face only an 7% decline in lead-test sales in 2018.
Requirements
1.
Prepare a
2018
sales budget for
Cole
& Sons assuming that
Cole
holds prices at
2017
levels.
2.
Prepare a
2018
sales budget for
Cole
& Sons assuming that
Cole
lowers the price of a lead test to
$230.
Should
Cole
lower the price of a lead test in
2018
if the company's goal is to maximize sales revenue?
In
2020,
Alderman
& Sons, a small environmental-testing firm, performed
12,400
radon tests for
$320
each and
16,600
lead tests for
$220
each. Because newer homes are being built with lead-free pipes, lead-testing volume is expected to decrease by
15%
next year. However, awareness of radon-related health hazards is expected to result in a
6%
increase in radon-test volume each year in the near future. Jim
Alderman
feels that if he lowers his price for lead testing to
$210
per test, he will have to face only a
5%
decline in lead-test sales in
2021.
Read the
requirements
LOADING...
.
Requirement 1. Prepare the sales budget for
Alderman
& Sons assuming that prices are held at
2020
levels.
Sales Budget
For the Year Ended December 31, 2021
Total revenues
Radon tests
Lead tests
Total
Requirement 2. Prepare the sales budget assuming that
Alderman
lowers the price of a…
The vice-president of sales and marketing, Madison Tremblay, is trying to plan for the coming year in terms of production needs to
meet the forecast sales. The board of directors is very supportive of any initiatives that will lead to increased operating income for the
company in the upcoming year.
Waterways markets a simple water controller and timer that it mass-produces. During 2022. the company sold 322.500 units at an
average selling price of $8.00 per unit. The variable costs were $1,193,250. and the fixed costs were $606,300.
What is the margin of safety, both in dollars and as a ratio? (Round ratio to 2 decimal places, e.g. 25.25%)
$
Margin of safety in dollars
Margin of safety ratio
Chapter 6 Solutions
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Ch. 6 - What are the four elements of the budgeting cycle?Ch. 6 - Define master budget.Ch. 6 - Strategy, plans, and budgets are unrelated to ore...Ch. 6 - Budgeted performance is a better criterion than...Ch. 6 - Production managers and marketing managers are...Ch. 6 - Budgets meet the cost-benefit test. They force...Ch. 6 - Define rolling budget. Give an example.Ch. 6 - Outline the steps in preparing an operating...Ch. 6 - The sales forecast is the cornerstone for...Ch. 6 - Prob. 6.10Q
Ch. 6 - Define Kaizen budgeting.Ch. 6 - Prob. 6.12QCh. 6 - Explain how the choice of the type of...Ch. 6 - What are some additional considerations that arise...Ch. 6 - Prob. 6.15QCh. 6 - Master budget. Which of the following statements...Ch. 6 - Operating and financial budgets. Which of the...Ch. 6 - Production budget. Superior Industries sales...Ch. 6 - Responsibility centers. Elmhurst Corporation is...Ch. 6 - Cash budget. Mary Jacobs, the controller of the...Ch. 6 - Sales budget, service setting. In 2017 Hart Sons,...Ch. 6 - Sales and production budget. The Coby Company...Ch. 6 - Direct material budget. Dawson Co. produces wine....Ch. 6 - Material purchases budget. The McGrath Company has...Ch. 6 - Revenues, production, and purchases budgets. The...Ch. 6 - Revenues and production budget. Saphire, Inc.,...Ch. 6 - Budgeting; direct material usage, manufacturing...Ch. 6 - Budgeting, service company. Ever Clean Company...Ch. 6 - Budgets for production and direct manufacturing...Ch. 6 - Activity-based budgeting. The Jerico store of...Ch. 6 - Kaizen approach to activity-based budgeting...Ch. 6 - Responsibility and controllability. Consider each...Ch. 6 - Responsibility, controllability, and stretch...Ch. 6 - Cash flow analysis, sensitivity analysis....Ch. 6 - Budget schedules for a manufacturer. Hale...Ch. 6 - Budgeted costs, Kaizen improvements environmental...Ch. 6 - Revenue and production budgets. (CPA, adapted) The...Ch. 6 - Budgeted income statement. (CMA, adapted) Smart...Ch. 6 - Prob. 6.39PCh. 6 - Comprehensive problem with ABC costing. Animal...Ch. 6 - Cash budget (continuation of 6-40). Refer to the...Ch. 6 - Comprehensive operating budget. Skulas, Inc.,...Ch. 6 - Cash budgeting, budgeted balance sheet....Ch. 6 - Comprehensive problem; ABC manufacturing, two...Ch. 6 - Cash budget. (Continuation of 6-44) (Appendix)...Ch. 6 - Budgeting and ethics. Jayzee Company manufactures...Ch. 6 - Kaizen budgeting for carbon emissions. Apex...Ch. 6 - Comprehensive budgeting problem; activity-based...
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