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What is the minimum price per unit at which the company should accept the special order ?
The company does not expect to be able to receive the full sales price of $120 per coat, and the company needs production storage space to make room .
Assume that the company prices its products using a 30% markup on total manufacturing cost to cover selling and administrative expenses.
Assuming zero opportunity costs, should the company accept the outside offer?
What type of cost is the $50,000 purchase price of the old machine?
Compute the net differential cost in deciding whether to make or buy the part.
Nice & Smooth and Rich & Thick are produced jointly at a cost of $160,000, which is allocated equally between them.
The company does not expect the new product to affect the sales of its other products.
Which product should Haws Electronics produce if its direct labor hours are limited?
Would you recommend that the company obtain any other information before establishing a sales price?
As the two brothers survey the damage, Sam's office manager approaches and says, "Well, look on the bright side, the machine was half depreciated."
What are the economic costs associated with keeping the sunglass display in the store window?
Drs. Hughes and Hawkins can bring in another doctor at a salary of $100,000 per year. If this new doctor can handle 5,000 patient visits per year.
Detienne Company manufactures and sells one product for $10 per unit. The unit contribution margin is 30% of the sales price, and fixed costs total $90,000.
Determine the number of blankets Kerry must sell to generate a profit of $1,000 per month.
Why is a knowledge of the contribution margin more useful than a knowledge of the markup per unit when management has to make a decision about profitability?
Jane can sell back to the baker at half cost any doughnuts she fails to sell at the carnival. Unused popcorn must be thrown away.
If the board voted to begin computer manufacturing, a new plant would need to be constructed. What should the board do?
Having the inventory on hand for your customers is the key to success. If I don't have what they are looking for, they will just go down the street.
How to analyze whether the difference between sales price and variable costs, as well as the volume of sales, is sufficient to pay for all fixed costs.
What is a differential cost? Give an example of how differential costs are used by managers making product and process decisions.
What is a sunk cost? Why are sunk costs irrelevant in product and process decision making?
Assuming that the manager's performance is evaluated on a residual income basis, determine whether each of the proposals should be accepted or rejected.
Calculate the gaming division's current residual income and the expected residual income on the proposed investment.
Evaluate the three investment proposals independently, and determine which should be accepted.