Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
16th Edition
ISBN: 9780134475585
Author: Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Chapter 6, Problem 6.21E

Sales budget, service setting. In 2017 Hart & Sons, a small environmental-testing firm, performed 11,400 radon tests for $260 each and 15,000 lead tests for $210 each. Because newer homes are being built with lead-free pipes, lead-testing volume is expected to decrease by 12% next year. However, awareness of radon-related health hazards is expected to result in a 5% increase in radon-test volume each year in the near future. Jim Hart feels that if he lowers his price for lead testing to $200 per test, he will have to face only a 4% decline in lead-test sales in 2018.

  1. 1. Prepare a 2018 sales budget for Hart & Sons assuming that Hart holds prices at 2017 levels.
  2. 2. Prepare a 2018 sales budget for Hart & Sons assuming that Hart lowers the price of a lead test to $200. Should Hart lower the price of a lead test in 2018 if the company’s goal is to maximize sales revenue?
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In 2017​, Cole & Sons, a small​ environmental-testing firm, performed 11,200 radon tests for $290 each and 15,800 lead tests for $240 each. Because newer homes are being built with​ lead-free pipes,​ lead-testing volume is expected to decrease by 12​% next year.​ However, awareness of​ radon-related health hazards is expected to result in a 4​% increase in​ radon-test volume each year in the near future. Jim Cole feels that if he lowers his price for lead testing to $230 per​ test, he will have to face only an 7​% decline in​ lead-test sales in 2018. Requirements 1. Prepare a 2018 sales budget for Cole ​& Sons assuming that Cole holds prices at 2017 levels. 2. Prepare a 2018 sales budget for Cole ​& Sons assuming that Cole lowers the price of a lead test to $230. Should Cole lower the price of a lead test in 2018 if the​ company's goal is to maximize sales​ revenue?
In 2020​, Alderman ​& Sons, a small​ environmental-testing firm, performed 12,400 radon tests for $320 each and 16,600 lead tests for $220 each. Because newer homes are being built with​ lead-free pipes,​ lead-testing volume is expected to decrease by 15​% next year.​ However, awareness of​ radon-related health hazards is expected to result in a 6​% increase in​ radon-test volume each year in the near future. Jim Alderman feels that if he lowers his price for lead testing to $210 per​ test, he will have to face only a 5​% decline in​ lead-test sales in 2021.   Read the requirements LOADING... .   Requirement 1. Prepare the sales budget for Alderman ​& Sons assuming that prices are held at 2020 levels.   Sales Budget For the Year Ended December 31, 2021       Total revenues Radon tests       Lead tests       Total       Requirement 2. Prepare the sales budget assuming that Alderman lowers the price of a…
The vice-president of sales and marketing, Madison Tremblay, is trying to plan for the coming year in terms of production needs to meet the forecast sales. The board of directors is very supportive of any initiatives that will lead to increased operating income for the company in the upcoming year. Waterways markets a simple water controller and timer that it mass-produces. During 2022. the company sold 322.500 units at an average selling price of $8.00 per unit. The variable costs were $1,193,250. and the fixed costs were $606,300. What is the margin of safety, both in dollars and as a ratio? (Round ratio to 2 decimal places, e.g. 25.25%) $ Margin of safety in dollars Margin of safety ratio

Chapter 6 Solutions

Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)

Ch. 6 - Define Kaizen budgeting.Ch. 6 - Prob. 6.12QCh. 6 - Explain how the choice of the type of...Ch. 6 - What are some additional considerations that arise...Ch. 6 - Prob. 6.15QCh. 6 - Master budget. Which of the following statements...Ch. 6 - Operating and financial budgets. Which of the...Ch. 6 - Production budget. Superior Industries sales...Ch. 6 - Responsibility centers. Elmhurst Corporation is...Ch. 6 - Cash budget. Mary Jacobs, the controller of the...Ch. 6 - Sales budget, service setting. In 2017 Hart Sons,...Ch. 6 - Sales and production budget. The Coby Company...Ch. 6 - Direct material budget. Dawson Co. produces wine....Ch. 6 - Material purchases budget. The McGrath Company has...Ch. 6 - Revenues, production, and purchases budgets. The...Ch. 6 - Revenues and production budget. Saphire, Inc.,...Ch. 6 - Budgeting; direct material usage, manufacturing...Ch. 6 - Budgeting, service company. Ever Clean Company...Ch. 6 - Budgets for production and direct manufacturing...Ch. 6 - Activity-based budgeting. The Jerico store of...Ch. 6 - Kaizen approach to activity-based budgeting...Ch. 6 - Responsibility and controllability. Consider each...Ch. 6 - Responsibility, controllability, and stretch...Ch. 6 - Cash flow analysis, sensitivity analysis....Ch. 6 - Budget schedules for a manufacturer. Hale...Ch. 6 - Budgeted costs, Kaizen improvements environmental...Ch. 6 - Revenue and production budgets. (CPA, adapted) The...Ch. 6 - Budgeted income statement. (CMA, adapted) Smart...Ch. 6 - Prob. 6.39PCh. 6 - Comprehensive problem with ABC costing. Animal...Ch. 6 - Cash budget (continuation of 6-40). Refer to the...Ch. 6 - Comprehensive operating budget. Skulas, Inc.,...Ch. 6 - Cash budgeting, budgeted balance sheet....Ch. 6 - Comprehensive problem; ABC manufacturing, two...Ch. 6 - Cash budget. (Continuation of 6-44) (Appendix)...Ch. 6 - Budgeting and ethics. Jayzee Company manufactures...Ch. 6 - Kaizen budgeting for carbon emissions. Apex...Ch. 6 - Comprehensive budgeting problem; activity-based...
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