Question 1:
In most organizations, customer satisfaction is one of the top priorities. As such, attention to customers is necessary for success. Briefly describe the four types of demands customers are currently placing on organizational performance, giving at least one example of each type of demand from the Australian business context.
Question 2:
Axle and Wheel Manufacturing currently produces 1,000 axles per month. The following per unit data apply for sales to regular customers:
| Direct materials |
$200 |
| Direct manufacturing labor |
30 |
| Variable manufacturing overhead |
60 |
| Fixed manufacturing overhead |
40 |
| Total manufacturing costs |
$330 |
The plant has capacity for 2,000 axles.
Required:
a. What is the total cost of producing 1,000 axles?
b. What is the total cost of producing 1,500 axles?
c. What is the per unit cost when producing 1,500 axles?
Question 3:
The following information pertains to Ball Company:
| Manufacturing costs |
$2,400,000 |
| Units manufactured |
40,000 |
| Beginning inventory |
0 units |
39,800 units are sold during the year for $100 per unit.
Required:
a. What is the average manufacturing cost per unit?
b. What is the amount of ending finished goods inventory?
c. What is the amount of gross margin?
Question 4:
Blankinship, Inc., sells a single product. The company's most recent income statement is given below.
| Sales |
$200,000 |
| Less variable expenses |
(120,000) |
| Contribution margin |
80,000 |
| Less fixed expenses |
(50,000) |
| Net income |
$ 30,000 |
Required:
a. Contribution margin ratio is
b. Breakeven point in total sales dollars is
c. To achieve $40,000 in net income, sales must total
d. If sales increase by $50,000, by how much amount will net income increase?