MANAGERIAL ACCOUNTING FOR MANAGERS
5th Edition
ISBN: 9781265056278
Author: Noreen
Publisher: MCG
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Chapter 6A, Problem 6A.7E
1.
To determine
Introduction: The incremental profit earned on sales of each unit as a result of all associated variable cost being deducted from the price of the product is termed as the contribution margin.
To calculate: The contribution margin.
2.
To determine
Introduction: The incremental profit earned on sales of each unit as a result of all associated variable cost being deducted from the price of the product is termed as the contribution margin.
To calculate: The percentage decrease in price and percentage increase in quantity.
3.
To determine
Introduction: The incremental profit earned on sales of each unit as a result of all associated variable cost being deducted from the price of the product is termed as the contribution margin.
The total contribution margin if the company sells the sheets at lower price
4.
To determine
Introduction: The incremental profit earned on sales of each unit as a result of all associated variable cost being deducted from the price of the product is termed as the contribution margin.
The increase in contribution margin if the company sells sheets at lower price.
5.
To determine
Introduction: The incremental profit earned on sales of each unit as a result of all associated variable cost being deducted from the price of the product is termed as the contribution margin.
The number of sheets company should sell at lower 7 to earn same contribution margin.
6.
To determine
Introduction: The incremental profit earned on sales of each unit as a result of all associated variable cost being deducted from the price of the product is termed as the contribution margin.
The percentage increase in number of sheets if the company wants sa,e contribution margin.
7.
To determine
Introduction: The incremental profit earned on sales of each unit as a result of all associated variable cost being deducted from the price of the product is termed as the contribution margin. If the Company should include an allocation of postal service’s common fixed costs.
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Problem A-4 The Economists' Approach to Pricing [LOA-1]
The postal service of St. Vincent, an island in the West Indies, obtains a significant portion of its revenues from sales of special souvenir sheets to stamp collectors. The souvenir sheets usually contain several high-value St. Vincent stamps depicting a common theme, such as the life of Princess Diana. The souvenir sheets are designed and printed for the postal service by Imperial Printing, a stamp agency service company in the United Kingdom. The souvenir sheets cost the postal service $1.05 each. St. Vincent has been selling these souvenir sheets for $8.00 each and ordinarily sells about 59,000 units. To test the market, the postal service recently priced a new souvenir sheet at $9.00 and sales dropped to 49,000 units.
Required:
1a. Calculate the contribution margin for sale price of $8.00 each or $9.00 each?
1b.Does the postal service of St. Vincent make more money selling souvenir sheets for $8.00 each or $9.00 each?…
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Task 1:
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A U.S.-based company imports furniture from Germany. In accordance with the contract, the U.S. company
will have to pay €8,000,000 for a shipment of furniture in 30 days. Information about the spot and forward
rates is given below:
Current spot rate
EUR/USD 0.800
EUR/USD 0.799
30-day forward rate
1. Describe the risk that the U.S. company is exposed to.
(1 USD costs 0.8 EUR)
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Currency Exchange Rates
Custom Shutters, Inc., manufactures plantation shutters according to customer order. The company has a reputation for producing excellent quality shutters that fit virtually any size or shape of
window. Sales are made in all 50 states. On July 1, Custom Shutters received orders from contractors in Switzerland and Japan. Lee Mills, president and co-owner of Custom Shutters, was
delighted. The Swiss order is for shutters priced at $64,000. The order is due in Geneva on September 1, with payment due in full on October 1. The Japanese order is for shutters priced at
$124,000. It is due in Tokyo on August 1, with payment due in full on October 1. Both orders are to be paid in the customer's currency. The Swiss customer has a reputation in the industry for late
payment, and it could take as long as 6 months. Lee has never received payment in foreign currency before. He had his accountant prepare the following table of exchange rates:
Exchange Rate for $1
Spot rate…
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