Homework
Learning outcomes of this homework:
a. Identify the role of managerial accounting in decision making, and the basic terms used to present useful information. Differentiate various global perspectives on the management of accounting and contrast them against US companies.
b. Compute manufacturing costs of goods sold (cogs) and examine the decision-making process pertinent to job order costing and budgeting analysis.
c. Analyze cost behaviors in relation to sales volume and making ethical managerial decisions that positively affect the bottom-line. Recommend strategies for problem solving related to these decisions.
d. Determine the use of the break-even time method for evaluating capital investments.
For this homework, develop a 5 pages response containing written narrative, figures, and charts.
Milano Co. manufactures and sells three products: product 1, product 2, and product 3. Their unit selling prices are product 1, $40; product 2, $30; and product 3, $20. The per unit variable costs to manufacture and sell these products are product 1, $30; product 2, $15; and product 3, $8. Their sales mix is reflected in a ratio of 6:4:2. Annual fixed costs shared by all three products are $270,000. One type of raw material has been used to manufacture products 1 and 2. The company has developed a new material of equal quality for less cost. The new material would reduce variable costs per unit as follows: product 1 by $10 and product 2 by $5. However, the new material requires new equipment, which will increase annual fixed costs by $50,000.
a. If the company continues to use the old material, determine its break-even point in both sales units and sales dollars of each individual product.
b. If the company uses the new material, determine its new break-even point in both sales units and sales dollars of each individual product.
c. What insight does this analysis offer management for long-term planning?
Format your homework according to the give formatting requirements:
a. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
b. The response also includes a cover page containing the title of the homework, the course title, the student's name, and the date. The cover page is not included in the required page length.
c. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.