İzmir Forwarding’s road transport price for one pallet of paint is TL 90/km. in a certain route. Variable costs per unit equal TL 40/km. The company expects total fixed costs to be TL 90,000 for the next month at  the projected transport level of 2,000 pallets. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately. Calculate the safety margin of İzmir Forwarding in pallets.

The insufficient capacity of SHELLA Craft is due to the availability of manpower that the company is currently lacking. One of the supervisors in the production department, En Shauqi suggested another option to use the service of external agency to recruit and hire workers at a rate of RM30 per hour. The company also will have to pay for transportation allowance for external workers amounting RM15,000. Evaluate the above suggestion. Suggest THREE (3) qualitative factors that need to be considered if the company decided to use the service of external agency.

Urmila ben

Praveen Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding that has not been as profitable as planned. Because Product XT is manufactured and marketed independently of the other products, its total costs can be precisely measured. Next year's plans call for a $200 selling price per unit. Its fixed costs for the year are expected to be $270,000. Variable costs for the year are expected to be $140 per unit. Required 1. Estimate Product XT's break-even point in terms of (a) sales units and (b) sales dollars. Check (10) Break-even sales, 4,500 units 2. Prepare a contribution margin income statement for Product XT at the break-even point.

Praveen Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding that has not been as profitable as planned. Because Product XT is manufactured and marketed independently of the other products, its total costs can be precisely measured. Next year's plans call for a $200 selling price per unit. Its fixed costs for the year are expected to be $270,000. Variable costs for the year are expected to be $140 per unit. Required 1. Estimate Product XT's break-even point in terms of (a) sales units and (b) sales dollars. Check (1a) Break-even sales, 4,500 units 2. Prepare a contribution margin income statement for Product XT at the break-even point.

A newly formed company must decide on a plant location. There are two alternatives under consideration: locate near the major raw materials or locate near the major customers. Locating near the raw materials will result in lower fixed and variable costs than locating near the market, but the owners believe that there would be a loss in sales volume because customers tend to favour local suppliers. Revenue per unit will be $160 in either case. Annual fixed costs ($ millions) Variable cost per unit Expected annual demand (units) Near raw materials Near customers 1. Using the above given information, determine the profits for each alternative. (Negative answers should be indicated by a minus sign.) 64 2. Which location would produce greater profit? O Near raw materials O Near customers Near Raw Materials $0.90 $ 40 8,600 Near Customers $1.00 $ 45 13,300

Valmont Company has developed a new industrial piece of equipment called the XP-200. The company is considering two methods of establishing a selling price for the XP-200-absorption cost-plus pricing and value-based pricing. Valmont's cost accounting system reports an absorption unit product cost for XP-200 of $9,300. Its markup percentage on absorption cost is 85%. The company's marketing managers have expressed concerns about the use of absorption cost-plus pricing because it seems to overlook the fact that the XP-200 offers superior performance relative to the comparable piece of equipment sold by Valmont's primary competitor. More specifically, the XP-200 can be used for 18,000 hours before replacement. It only requires $1,900 of preventive maintenance during its useful life and it consumes $165 of electricity per 900 hours used. These figures compare favorably to the competing piece of equipment that sells for $18,000, needs to be replaced after 9,000 hours of use, requires $3,800…

Valmont Company has developed a new industrial piece of equipment called the XP-200. The company is considering two methods of establishing a selling price for the XP-200-absorption cost-plus pricing and value -based pricing. Valmont's cost accounting system reports an absorption unit product cost for XP-200 of $ 9,400. Its markup percentage on absorption cost is 85%. The company's marketing managers have expressed concerns about the use of absorption cost- plus pricing because it seems to overlook the fact that the XP-200 offers superior performance relative to the comparable piece of equipment sold by Valmont's primary competitor. More specifically, the XP-200 can be used for 19,000 hours before replacement. It only requires $2,000 of preventive maintenance during its useful life and it consumes $170 of electricity per 950 hours used. These figures compare favorably to the competing piece of equipment that sells for $19,000, needs to be replaced after 9, 500 hours of use, requires…

You need 1,000 units of product Y per month. You currently make product Y in-house at a cost of $7/unit, which consists of $2/unit of fixed costs and $5/unit of variable costs. An outside supplier has offered to manufacture product Y for you at a wholesale price of $2 per unit. If you outsource the production of Y to the outside supplier in the short term, your profit will: increase by $3,000 decrease by $2,000 remain the same decrease by $3,000 increase by $2,000