Utah Utensil has developed a new kitchen utensil. The firm has conducted significant market research and estimated the following pattern for sales of the new product:
Year Expected Volume Expected Price per Unit
1 48,000 units $19
2 48,000 units 20
3 90,000 units 16
4 40,000 units 12
If the firm desires to net $3.50 per unit in profit over the life of the product, and selling and administrative expenses are expected to average $50,000 per year, what is the target cost to produce the new utensil?
Click here for the solution: Utah Utensil has developed a new kitchen utensil
Showing posts with label kitchen. Show all posts
Showing posts with label kitchen. Show all posts
Sunday, September 6, 2015
Tuesday, August 18, 2015
Moon Company includes 1 coupon in each box of soap powder that it packs, 20 coupons being redeemable for a premium consisting of a kitchen utensil
Moon Company includes 1 coupon in each box of soap powder that it packs, 20 coupons being redeemable for a premium consisting of a kitchen utensil. In 2010, Moon Company purchased 12,000 premiums at $1.00 each and sold 360,000 boxes of soap powder @ $4.00 per box. Based on past experience, it is estimated that 60% of the coupons will be redeemed. During 2010, 96,000 coupons were presented for redemption.
During 2011, 19,000 premiums were purchased at $1.10. The company sold 800,000 boxes of soap at $4.00 and 330,000 coupons were presented for redemption.
Instructions
Prepare all the entries that would be made relative to sales of soap powder and to the premium plan in both 2010 and 2011. Assume a FIFO inventory flow.
Click here for the solution: Moon Company includes 1 coupon in each box of soap powder that it packs, 20 coupons being redeemable for a premium consisting of a kitchen utensil
During 2011, 19,000 premiums were purchased at $1.10. The company sold 800,000 boxes of soap at $4.00 and 330,000 coupons were presented for redemption.
Instructions
Prepare all the entries that would be made relative to sales of soap powder and to the premium plan in both 2010 and 2011. Assume a FIFO inventory flow.
Click here for the solution: Moon Company includes 1 coupon in each box of soap powder that it packs, 20 coupons being redeemable for a premium consisting of a kitchen utensil
Friday, July 31, 2015
H. Banks Company would like to design, produce, and sell versatile toasters for the home kitchen market
Exercise 13-35 Target Costing
H. Banks Company would like to design, produce, and sell versatile toasters for the home kitchen market. The toaster will have four slots that adjust in thickness to accommodate both slim slices of bread and oversized bagels. The target price is $75. Banks requires that new products be priced such that 20 percent of the price is profit.
Instructions
1. Calculate the amount of desired profit per unit of the new toaster.
2. Calculate the target cost per unit of the new toaster.
Click here for the solution: H. Banks Company would like to design, produce, and sell versatile toasters for the home kitchen market
H. Banks Company would like to design, produce, and sell versatile toasters for the home kitchen market. The toaster will have four slots that adjust in thickness to accommodate both slim slices of bread and oversized bagels. The target price is $75. Banks requires that new products be priced such that 20 percent of the price is profit.
Instructions
1. Calculate the amount of desired profit per unit of the new toaster.
2. Calculate the target cost per unit of the new toaster.
Click here for the solution: H. Banks Company would like to design, produce, and sell versatile toasters for the home kitchen market
Monday, June 29, 2015
Anna Bellatorre, Inc. manufactures five models of kitchen appliances at its Mesa plant
Anna Bellatorre, Inc. manufactures five
models of kitchen appliances at its Mesa plant. The company is
installing activity-based costing and has identified the following
activities performed at its Mesa plant.
1. Designing new models.
2. Purchasing raw materials and parts.
3. Storing and managing inventory.
4. Receiving and inspecting raw materials and parts.
5. Interviewing and hiring new personnel.
6. Machine forming sheet steel into appliance parts.
7. Manually assembling parts into appliances.
8. Training all employees of the company.
9. Insuring all tangible fixed assets.
10. Supervising production.
11. Maintaining and repairing machinery and equipment.
12. Painting and packaging finished appliances.
Having analyzed its Mesa plant operations for purposes of installing activity-based costing, Anna Bellatorre, Inc. identified its activity cost centers. It now needs to identify relevant activity cost drivers in order to assign overhead costs to its products.
Click here for the solution: Anna Bellatorre, Inc. manufactures five models of kitchen appliances at its Mesa plant
1. Designing new models.
2. Purchasing raw materials and parts.
3. Storing and managing inventory.
4. Receiving and inspecting raw materials and parts.
5. Interviewing and hiring new personnel.
6. Machine forming sheet steel into appliance parts.
7. Manually assembling parts into appliances.
8. Training all employees of the company.
9. Insuring all tangible fixed assets.
10. Supervising production.
11. Maintaining and repairing machinery and equipment.
12. Painting and packaging finished appliances.
Having analyzed its Mesa plant operations for purposes of installing activity-based costing, Anna Bellatorre, Inc. identified its activity cost centers. It now needs to identify relevant activity cost drivers in order to assign overhead costs to its products.
Instructions
Using the activities listed above, identify for each activity one or more cost drivers that might be used to assign overhead to Anna Bellatorre's five products.
Using the activities listed above, identify for each activity one or more cost drivers that might be used to assign overhead to Anna Bellatorre's five products.
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