How much of a reduction in gross margin did each product sustain after recognizing the higher costs? (Round answers to 2 decimalplaces, e.g. 52.75%.)Office chairGross margin percentage%Sit-to-stand deskPrinter stand%% The bill of materials for each product at Donald's Office Supply is very specific, right down to the number of casters needed for each office chair. Donald recognizeshow important these documents are for planning purposes, but his operations managers appreciate them as well since they use this information to guide their materialrequisitions when it's time for production.Here are the budgeted product costs and selling prices, respectively, for the company's three key products:Product CostSelling PriceOffice chair$130$229Sit-to-stand desk215365Printer stand110205Donald has fine-tuned all cost expectations for his products, and his selling prices are quite stable for each product, as well. So, to say Donald was surprised when hisaccountant reported significantly less profit margin than what he was expecting is the understatement of the year.According to the accountant, the difference is almost entirely attributable to the significant and recent increase in shipping costs for the company's raw materials.These higher freight costs caused a 20% increase to the budgeted product costs presented above.

Gross Margin % is the ratio of the Gross Profits to the Net Sales made during the period. Gross…

How much of a reduction in gross margin did each product sustain after recognizing the higher costs? (Round answers to 2 decimal places, e.g. 52.75%.) Office chair Sit-to-stand desk Printer stand Gross margin percentage % % %

How much of a reduction in gross margin did each product sustain after recognizing the higher costs? (Round answers to 2 decimal places, e.g. 52.75%.) Office chair Sit-to-stand desk Printer stand Gross margin percentage % % %

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 7E: The management of Nova Industries Inc. manufactures gasoline and diesel engines through two...

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The bill of materials for each product at Donald's Office Supply is very specific, right down to the number of casters needed for each office chair. Donald recognizes how important these documents are for planning purposes, but his operations managers appreciate them as well since they use this information to guide their material requisitions when it's time for production. Here are the budgeted product costs and selling prices, respectively, for the company's three key products: Product Cost Selling Price Office chair $130 $229 Sit-to-stand desk 215 365 Printer stand 110 205 Donald has fine-tuned all cost expectations for his products, and his selling prices are quite stable for each product, as well. So, to say Donald was surprised when his accountant reported significantly less profit margin than what he was expecting is the understatement of the year. According to the accountant, the difference is almost entirely attributable to the significant and recent increase in shipping costs…
The bill of materials for each product at Donald's Office Supply is very specific, right down to the number of casters needed for each office chair. Donald recognizes how important these documents are for planning purposes, but his operations managers appreciate them as well since they use this information to guide their material requisitions when it's time for production. Here are the budgeted product costs and selling prices, respectively, for the company's three key products: Product cost Selling Price Office chair $130 $229 Sit to Stand desk $215 $365 Printer stand $110 $205 Donald has fine-tuned all cost expectations for his products, and his selling prices are quite stable for each product, as well. So, to say Donald was surprised…
The bill of materials for each product at Steven’s Office Supply is very specific, right down to the number of casters needed for each office chair. Steven recognizes how important these documents are for planning purposes, but his operations managers appreciate them as well since they use this information to guide their material requisitions when it’s time for production.Here are the budgeted product costs and selling prices, respectively, for the company’s three key products: Product Cost Selling Price Office chair $145 $259 Sit-to-stand desk 230 395 Printer stand 125 235 Steven has fine-tuned all cost expectations for his products, and his selling prices are quite stable for each product, as well. So, to say Steven was surprised when his accountant reported significantly less profit margin than what he was expecting is the understatement of the year.According to the accountant, the difference is almost entirely attributable to the significant…
Current Attempt in Progress The bill of materials for each product at Kevin's Office Supply is very specific, right down to the number of casters needed for each office chair. Kevin recognizes how important these documents are for planning purposes, but his operations managers appreciate them as well since they use this information to guide their material requisitions when it's time for production. Here are the budgeted product costs and selling prices, respectively, for the company's three key products: Office chair Sit-to-stand desk Printer stand Product Cost $165 250 Show Transcribed Text (b) 145 Kevin has fine-tuned all cost expectations for his products, and his selling prices are quite stable for each product, as well. So, to say Kevin was surprised when his accountant reported significantly less profit margin than what he was expecting is the understatement of the year. According to the accountant, the difference is almost entirely attributable to the significant and recent…
Vaughn Creations sells window treatments (shades, blinds, and awnings) to both commercial and residential customers. The following information relates to its budgeted operations for the current year. Revenues Direct materials costs Direct labor costs. Overhead costs Operating income (loss) Revenues Direct materials costs Direct labor costs. Overhead costs Operating income (loss) Activity Cost Pools Scheduling and travel Setup time Supervision The controller, Peggy Kingman, is concerned about the residential product line. She cannot understand why this line is not more profitable given that the installations of window coverings are less complex for residential customers. In addition, the residential client base resides in close proximity to the company office, so travel costs are not as expensive on a per client visit for residential customers. As a result, she has decided to take a closer look at the overhead costs assigned to the two product lines to determine whether a more accurate…
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Given the following information from Rowdy Enterprises direct materials budget, how much direct materials needs to be purchased?
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Consumer Focus is a marketing research firm that organizes focus groups for consumerproduct companies. A Consumer Focus Staff member attends each session to ensure that all the logistical aspects run smoothly”In light to the above statement, classify each of the following cost items as:a. Direct or Indirect (D or I) costs with respect to each individual focus group.b. Variable or Fixed (V or F) costs with respect to how the total costs of Consumer Focus change as the number of focus groups conducted changes. (If in doubt, select on the basis of whether the total costs will change substantially if there is a large change in the number of groups conducted.)You will have two answers (D or I; V or F) for each of the following items followed by a short interpretation note. Use the sample answer table and continue from Cost Item BCost ItemA. Payment to individual in each focus group to provide comments on new products.B. Annual subscription of Consumer Focus to Consumer Reports magazine.C.…
As a start-up / ‘new’ manufacturer, one of your tasks as the Operations Manager is to identify the behaviour of manufacturing costs to develop a production cost budget. You know three methods can be used to identify cost behaviour from past data, but past data are not available because this is a start-up. Identify and compare the three known methods of measuring cost behaviour.
Ecco Ltd is engaged in the manufacture of components for the computer hardware industry. The factory consists of three production departments, A, B and C and a number of service departments. The costing system uses a single production overhead absorption rate expressed as a percentage of direct labour cost. A newly qualified accountant has just joined the company and has expressed a view that departmental overhead absorption rates would result in more accurate job costs. With this in mind, she has produced the following budgeted information for the next year. The budgeted production overheads in each department are after the allocation of service department costs. (a) State with reasons, whether you agree with the view that ‘departmental overhead absorption rates would result in more accurate job costs’ and outline why a company would calculate predetermined annual overhead absorption rates as opposed to rates calculated from actual weekly or monthly activity and expenditure. (b) (i)…