MANAGERIAL ACCOUNTING-CUSTOM EBOOK>I<
12th Edition
ISBN: 9781307661217
Author: HILTON
Publisher: INTER MCG2
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Chapter 6, Problem 10RQ
To determine
Comment on the response of cost analyst.
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In a strategy meeting, a manufacturing company’s president said, “If we raise the price of our product, the company’s break-even point will be lower.” Thefinancial vice president responded by saying, “Then we should raise our price. The company will be less likely to incur a loss.” Do you agree with the president? Why? Do you agree with the financial vice president? Why?
Consider how Break-Even analysis would change (i.e. how is the breakeven point affected) in the following scenarios. Note that each scenario is independent and all non-specified factors remain unchanged:
The firm finds it necessary to reduce the sales price per unit because of competitive conditions in the market.
The firm’s direct labor costs increase as a result of a new labor contract
The Occupational Safety and Health Administration requires the firm to install new ventilating equipment in its plant (assume that this action has no effect on worker productivity).
In your paper, make sure to demonstrate how Break-Even analysis might align with Biblical Perspectives and also discuss how this type of analysis might affect or has affected your decision-making whether in business or personal ventures.
Shatta movement LTD produces a single product. The company's directors want to explore new markets, and they require an accurate analysis of the firm's cost structure for both forecasting and pricing purpose. An attemp to provide this analysis from the aggregation of individual cost has produced a poor correspondence between actual and predicted cost. You are an accountant employee by Shatta Movement Ltd, and you have been asked to provide a statistical approach to the problem. The financial director has given you the following data:
Period
output (unit)
average unit cost (GHS)
July
August
September
October
November
December
9,000
14,000
11,000
8,000
6,000
12,000
12.8
13
11.4
12
13
11.7
You obtain the following further information:
1. The cost from which the averages have been computed consist of the firm's entire cost for the relevant month.
2. Fixed coat can be assumed to be unaffected by seasonal factors except for harmattan heating. In July and August a…
Chapter 6 Solutions
MANAGERIAL ACCOUNTING-CUSTOM EBOOK>I<
Ch. 6 - Describe the importance of cost behavior patterns...Ch. 6 - Define the following terms, and explain the...Ch. 6 - Suggest an appropriate activity base (or cost...Ch. 6 - Draw a simple graph of each of the following types...Ch. 6 - Explain the impact of an increase in the level of...Ch. 6 - Explain why a manufacturers cost of supervising...Ch. 6 - Explain the impact of an increase in the level of...Ch. 6 - Prob. 8RQCh. 6 - Indicate which of the following descriptions is...Ch. 6 - Prob. 10RQ
Ch. 6 - What is meant by a learning curve? Explain its...Ch. 6 - Suggest an appropriate independent variable to use...Ch. 6 - What is an outlier? List some possible causes of...Ch. 6 - Explain the cost estimation problem caused by...Ch. 6 - Describe the visual-fit method of cost estimation....Ch. 6 - What is the chief drawback of the high-low method...Ch. 6 - Explain the meaning of the term least squares in...Ch. 6 - Prob. 18RQCh. 6 - Prob. 19RQCh. 6 - List several possible cost drivers that could be...Ch. 6 - Prob. 21RQCh. 6 - Prob. 22ECh. 6 - The behavior of the annual maintenance and repair...Ch. 6 - WMEJ is an independent television station run by a...Ch. 6 - Jonathan Macintosh is a highly successful...Ch. 6 - Jonathan Macintosh is a highly successful...Ch. 6 - The Iowa City Veterinary Laboratory performs a...Ch. 6 - Chillicothe Meat Company produces one of the best...Ch. 6 - Rio Bus Tours has incurred the following bus...Ch. 6 - Prob. 31ECh. 6 - Prob. 32ECh. 6 - Prob. 33ECh. 6 - Gator Beach Marts, a chain of convenience grocery...Ch. 6 - For each of the cost items described below, choose...Ch. 6 - The following selected data were taken from the...Ch. 6 - Antioch Extraction, which mines ore in Montana,...Ch. 6 - Nations Capital Fitness, Inc. operates a chain of...Ch. 6 - The Allegheny School of Music has hired you as a...Ch. 6 - Prob. 40PCh. 6 - (Note: Instructors who wish to cover all three...Ch. 6 - Refer to the original data in the preceding...Ch. 6 - Shortly after being hired as an analyst with...Ch. 6 - The controller of Chittenango Chain Company...Ch. 6 - Dana Rand owns a catering company that prepares...Ch. 6 - Prob. 48PCh. 6 - Earth and Artistry, Inc. provides commercial...Ch. 6 - Prob. 51CCh. 6 - Refer to the data and accompanying information in...
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