Anthony works in the accounting department of a local footwear manufacturer that specializes in clogs and boots. Clogs and boots typically sell for $95 and $191 per pair, respectively. Based on past experience, fashion trends, and seasonal shifts, the company expected to sell 750 pairs of clogs and 250 pairs of boots. The variable cost per pair was $48 for clogs and $77 for boots. At the end of the year, Anthony evaluated the company's sales and contribution margin amounts against the budget. Actual results for the year were as follows. . . . (a) Actual sales volume: clogs, 858; boots, 242. Actual selling price: clogs, $106 per pair; boots, $182 per pair. Actual per-unit variable costs for each product were the same as budgeted. For the year just ended, determine the company's total revenues, total variable costs, and total contribution margin for its (1) master budget, (2) flexible budget, and (3) actual income statement. Total revenues Total variable costs $ eTextbook and Media. $ Total contribution margin $ Master Budget I $ $ to $ Flexible Budget $ $ $ Actual

Anthony works in the accounting department of a local footwear manufacturer that specializes in clogs and boots. Clogs and boots typically sell for $95 and $191 per pair, respectively. Based on past experience, fashion trends, and seasonal shifts, the company expected to sell 750 pairs of clogs and 250 pairs of boots. The variable cost per pair was $48 for clogs and $77 for boots. At the end of the year, Anthony evaluated the company's sales and contribution margin amounts against the budget. Actual results for the year were as follows. . . . (a) Actual sales volume: clogs, 858; boots, 242. Actual selling price: clogs, $106 per pair; boots, $182 per pair. Actual per-unit variable costs for each product were the same as budgeted. For the year just ended, determine the company's total revenues, total variable costs, and total contribution margin for its (1) master budget, (2) flexible budget, and (3) actual income statement. Total revenues Total variable costs $ eTextbook and Media. $ Total contribution margin $ Master Budget I $ $ to $ Flexible Budget $ $ $ Actual

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 18E

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Maria Lorenzi owns an ice cream stand that she operates during the summer months in West Yellowstone, Montana. She is unsure how to price her ice cream cones and has experimented with two prices in successive weeks during the busy August season. The number of people who entered the store was roughly the same each week. During the first week, she priced the cones at $3.60 and 1,855 cones were sold. During the second week, she priced the cones at $4.10 and 1,450 cones were sold. The variable cost of a cone is $.40 and consists solely of the costs of the ice cream and the cone itself. The fixed expenses of the ice cream stand are $2,000 per week. Required: 1. What profit did Maria earn during the first week when her price was $3.60? 2. At the start of the second week, Maria increased her selling price by what percentage? What percentage did unit sales decrease? (Round your percentage answers to 2 decimal place.) 3. What profit did Maria earn during the second week when her price was…
Maria Lorenzi owns an ice cream stand she operates during the summer months in West Yellowstone, Montana. She is unsure how to price her ice cream cones and has experimented with two prices in successive weeks during the busy August season. The number of people who entered the store was roughly the same each week. During the first week, she priced the cones at $4.40 and 2,075 cones were sold. During the second week, she priced the cones at $4.90 and 1,650 cones were sold. The variable cost of a cone is $.80 and consists solely of the costs of the ice cream and the cone itself. The fixed expenses of the ice cream stand are $2,020 per week. Required: 1. What profit did Maria earn during the first week when her price was $4.40? 2. At the start of the second week, Maria increased her selling price by what percentage? What percentage did unit sales decrease? Note: Round your percentage answers to 2 decimal place. 3. What profit did Maria earn during the second week when her price was $4.90?…
Maria Lorenzi owns an ice cream stand that she operates during the summer months in West Yellowstone, Montana. She is unsure hov to price her ice cream cones and has experimented with two prices in successive weeks during the busy August season. The number of people who entered the store was roughly the same each week. During the first week, she priced the cones at $5.80 and 2,460 cones were sold. During the second week, she priced the cones at $6.30 and 2,000 cones were sold. The variable cost of a cone is $1.50 and consists solely of the costs of the ice cream and the cone itself. The fixed expenses of the ice cream stand are $2,055 per week. Required: 1. What profit did Maria earn during the first week when her price was $5.80? 2. At the start of the second week, Maria increased her selling price by what percentage? What percentage did unit sales decrease? (Round your percentage answers to 2 decimal place.) 3. What profit did Maria earn during the second week when her price was…
William works in the accounting department of a local footwear manufacturer that specializes in clogs and boots. Clogs and boots typically sell for $105 and $207 per pair, respectively. Based on past experience, fashion trends, and seasonal shifts, the company expected to sell 780 pairs of clogs and 220 pairs of boots. The variable cost per pair was $49 for clogs and $76 for boots. At the end of the year, William evaluated the company's sales and contribution margin amounts against the budget. Actual results for the year were as follows. (a) Actual sales volume: clogs, 935; boots, 165. Actual selling price: clogs, $115 per pair; boots, $198 per pair. Actual per-unit variable costs for each product were the same as budgeted. Your answer is correct. For the year just ended, determine the company's total revenues, total variable costs, and total contribution margin for its (1) master budget. (2) flexible budget, and (3) actual income statement. Total revenues Total variable costs Total…
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Lia ITZY has determined that the annual demand for number 6 screws is 100,000 screws. Lia, who works in her brother’s hardware store, is in charge of purchasing. She estimates that it costs $10 every time an order is placed. This cost includes her wages, the cost of the forms used in placing the order, and so on. Furthermore, she estimates that the cost of carrying one screw in inventory for a year is one-half of 1 cent. Assume that the demand is constant throughout the year. QUESTION: What would the average inventory be? What would the annual holding cost be?
The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is thinking of expanding his sales by hiring high school students, on a commission basis, to sell sweatshirts bearing the name and mascot of the local high school. These sweatshirts would have to be ordered from the manufacturer six weeks in advance, and they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $17.00 each with a minimum order of 152 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 152. Since Hooper’s plan would not require any additional facilities, the only costs associated with the project would be the costs of the sweatshirts and the costs of the sales commissions. The selling price of the sweatshirts would be $34.00 each. Hooper would pay the students a commission of $4.00 for each shirt sold. Required: 1. What level of unit sales and dollar sales is needed to attain a target profit of $7,904?…
The Shirt Works sells a large variety of tee shirts and sweatshirts. Steve Hooper, the owner, is thinking of expanding his sales by hiring high school students, on a commission basis, to sell sweatshirts bearing the name and mascot of the local high school. These sweatshirts would have to be ordered from the manufacturer six weeks in advance, and they could not be returned because of the unique printing required. The sweatshirts would cost Hooper $18.00 each with a minimum order of 174 sweatshirts. Any additional sweatshirts would have to be ordered in increments of 174. Since Hooper’s plan would not require any additional facilities, the only costs associated with the project would be the costs of the sweatshirts and the costs of the sales commissions. The selling price of the sweatshirts would be $36.00 each. Hooper would pay the students a commission of $5.00 for each shirt sold. Required: 1.What level of unit sales and dollar sales is needed to attain a target profit of $9,048? 2.…
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