Concord Company makes swimsuits and sells these suits directly to retailers. Although Concord has a variety of suits, it does not make the Performance suit used by highly skilled swimmers. The market research department believes that a strong market exists for this type of suit. The department indicates that the Performance suit would sell for approximately $100. Given its experience, Concord believes the Performance suit would have the following manufacturing costs. Direct materials $28 Direct labor 32 Manufacturing overhead 40 Total costs $100 What is the highest acceptable manufacturing cost Concord would be willing to incur to produce the Performance swimsuit, if it desired a profit of $27 per unit? (Assume target costing.) Target cost $ 4 eTextbook and Media

Concord Company makes swimsuits and sells these suits directly to retailers. Although Concord has a variety of suits, it does not make the Performance suit used by highly skilled swimmers. The market research department believes that a strong market exists for this type of suit. The department indicates that the Performance suit would sell for approximately $100. Given its experience, Concord believes the Performance suit would have the following manufacturing costs. Direct materials $28 Direct labor 32 Manufacturing overhead 40 Total costs $100 What is the highest acceptable manufacturing cost Concord would be willing to incur to produce the Performance swimsuit, if it desired a profit of $27 per unit? (Assume target costing.) Target cost $ 4 eTextbook and Media

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter11: Linear Optimization Models

Section: Chapter Questions

Problem 1P: Kelson Sporting Equipment, Inc., makes two types of baseball gloves: a regular model and a catchers...

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Sarasota Company makes swimsuits and sells these suits directly to retailers. Although Sarasota has a variety of suits, it does not make the Performance suit used by highly skilled swimmers. The market research department believes that a strong market exists for this type of suit. The department indicates that the Performance suit would sell for approximately $100. Given its experience, Sarasota believes the Performance suit would have the following manufacturing costs. Direct materials Direct labor Manufacturing overhead Total costs (a1) $29 Selling price 35 36 $100 Assume that Sarasota uses cost-plus pricing, setting the selling price 25% above its costs. What would be the price charged for the Performance swimsuit?
Leno Company makes swimsuits and sells these suits directly to retailers. Although Leno has a variety of suits, it does not make the All- Body suit used by highly skilled swimmers. The market research department believes that a strong market exists for this type of suit. The department indicates that the All-Body suit would sell for approximately $100. Glven its experience, Leno believes the All-Body suit would have the following manufacturing costs. Direct materials $29 Directlabor 27 Manufacturing overhead 44 Total costs $100
Sarasota Company makes swimsuits and sells these suits directly to retailers. Although Sarasota has a variety suits, it does not make the Performance suit used by highly skilled swimmers. The market research department believes that a strong market exists for this type of suit. The department indicates that the Performance suit would sell for approximately $100. Given its experience, Sarasota believes the Performance suit would have the following manufacturing costs. Direct materials Direct labor Manufacturing overhead Total costs (a1) (b) Your answer is correct. Selling price $ Assume that Sarasota uses cost-plus pricing, setting the selling price 25% above its costs. What would be the price charged for the Performance swimsuit? eTextbook and Media $29 35 36 Selling price $ $100 125 Attempts: 1 of 5 used Assume that Sarasota uses target costing. What is the price that Sarasota would charge the retailer for the Performance swimsuit?
Leno Company makes swimsuits and sells these suits directly to retailers. Although Leno has a variety of suits, it does not make the All- Body suit used by highly skilled swimmers. The market research department believes that a strong market exists for this type of suit. The department indicates that the All-Body suit would sell for approximately $100. Given its experience, Leno believes the All-Body suit would have the following manufacturing costs. Direct materials Direct labor Manufacturing overhead Total costs (a1) Selling price $ eTextbook and Media $29 Save for Later 29 Assume that Leno uses cost-plus pricing, setting the selling price 26% above its costs. What would be the price charged for the All- Body swimsuit? 42 $100 Assistance Used Attempts: 0 of 3 used Submit Answer
King Bathroom Fixtures (KBF) makes faucets, basins, and so on primarily for home use and sold through major retail chains. The design team at KBF has been working on a unique design to provide reasonable pressure while still conserving water. The market is quite competitive and KBF analysts believe that the fixture could sell for a unit price of $36.40. The cost accounting team at KBF has estimated the following manufacturing costs for the new design. Direct materials $ 19.75 Direct labor 5.90 Manufacturing overhead 8.85 Total $ 34.50 An operating profit of 12 percent of manufacturing costs is required for all new products at KBF without the explicit consent of the top executive team. At KBF, operating margin is defined as revenues less manufacturing costs, all divided by manufacturing costs). Required: a. Suppose KBF uses cost-plus pricing, setting the price equal to manufacturing costs plus 12 percent of manufacturing costs. What price should it charge for the…
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Mattress Comfort Corporation manufactures two types of mattresses, Dreamer and Sleeper. Dreamer has a complex design that uses gel-filled compartments to provide support. Sleeper is simpler to manufacture and uses conventional padding. Last year, Mattress Comfort had the following revenues and costs: Dreamer Sleeper Total Revenue $1,200,000 $900,000 $2,100,000 Direct Materials 500,000 450,000 950,000 Direct Labor 250,000 200,000 450,000 Indirect Costs: Administration 80,000 Production Setup 100,000 Quality Control 120,000…
Flash E Card Manufacturing manufactures software parts for the computer software systems that produce e -cards. The Flash II part is currently manufactured in the Computer Department. The Data Department also produces the part and the plant has excess capacity to produce the Flash ll part. The current market price of the Flash Il part is $500. The managerial accountant reported the following manufacturing costs and variable expense data: Flash E-Card Manufacturing Manufacturing Costs and Variable Expense Report Flash Component Direct materials $800 $170 Direct labor $110 Variable manufacturing overhead Fixed manufacturing overhead (current production level) Variable selling expenses (only incurred on sales to outside consumers) $125 $140 If the highest acceptable transfer price is $500 in the market, what is the lowest acceptable in house price the Data Department should receive to produce the part in house at the Computer Department? O A. $1,080 О В. $800 О С. $170 O D. $110
Power Trampolines produces fitness trampolines for both personal and commercial use. An up-and-coming fitness. facility brand, Bounce It Out, has just asked Power Trampolines for a quote to purchase 300 trampolines for use in its facilities. Power Trampolines provided the following quote to Bounce It Out: Quote for Bounce It Out Manufacturing Costs Direct Materials $11,850 Direct Labor 8, 500 Manufacturing Overhead 15,800 Total Costs $36, 150 Markup (per company policy) 60% Total Estimated Price $57,840 As a fairly new company, Bounce It Out is unable to pay this amount. They provide a counter-offer of $45,000 for the 300 trampolines. The company asks for your help in deciding whether or not to accept this offer. They provide you with the following information to aid in your decision: - They have excess capacity and could manufacture the 300 trampolines without impacting their other manufacturing needs - Manufacturing overhead is allocated based on direct labor dollars -Budgeted…
The Rosa model of Mohave Corp. is currently manufactured as a very plain umbrella with no decoration. The company is considering changing this product to a much more decorative model by adding a silk-screened design and embellishments. A summary of the expected costs and revenues for Mohave’s two options follows: Rosa Umbrella Decorated Umbrella Estimated demand 21,000 units 21,000 units Estimated sales price $ 23.00 $ 33.00 Estimated manufacturing cost per unit Direct materials $ 13.50 $ 15.50 Direct labor 3.50 6.00 Variable manufacturing overhead 2.50 4.50 Fixed manufacturing overhead 4.00 4.00 Unit manufacturing cost $ 23.50 $ 30.00 Additional development cost $ 10,000 Required:1. Determine the increase or decrease in profit if Mohave sells the Rosa Umbrella with the additional decorations.2. Should Mohave add decorations to the Rosa umbrella?3-a. Suppose that the…
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