Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 8.2SE
1.
To determine
To find: Whether Company WS emphasize on target costing or cost plus costing and why
2.
To determine
To find: Price that company WS should charge if competitors price is $65 per day
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Winter Run
operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. Investors would like to earn a
11%
return on investment on the company's
$156,000,000
of assets. The company primarily incurs fixed costs to groom the runs and operate the lifts.
Winter Run
projects fixed costs to be
$33,000,000
for the ski season. The resort serves about
660,000
skiers and snowboarders each season. Variable costs are about
$11
per guest. Currently, the resort has such a favorable reputation among skiers and snowboarders that it has some control over the lift ticket prices.
Read the
requirements1.
Requirement 1. Would
Winter Run
emphasize target pricing or cost-plus pricing? Why?
Winter Run
should emphasize a
cost-plus
approach to pricing because it has been able to differentiate its ski resort from others in the area. Because of its good reputation, managers will have
some
control over…
Please step by step process.
Professor von Nordenflycht presents Dean Kayande with two new proposals for offering a graduate certificate program. Both programs will cost $60,000, for classroom and instructor time. Both programs are projected to have two possible revenue outcomes. Program 1, which focuses on accounting, is projected to have a 50% chance of generating $150,000 in revenue and a 50% chance of generating $100,000 in revenue. Project 2, which focuses on cryptocurrencies, is predicted to have a 62.5% chance of generating $200,000 in revenue or, otherwise, generating no revenue!
a. What is the expected value of each program?
b. What is the variance of each program?
Make a feasibility study for Virtual Reality In Education project
by making the balance sheet, Project Cost and Financial Plan.
The donor is a non-profit financial institution.
The investment cost of the project is $500,000.
land $100,000
Construction $100,000
Supplies and equipment $200,000
Stuff: 2 employees, 2 guards and 2 cleaners, working 8 hours, an annual salary of $100,000
The answer is only tables of the the balance sheet, Project Cost and Financial Plan.
Chapter 8 Solutions
Managerial Accounting (5th Edition)
Ch. 8 - Prob. 1QCCh. 8 - (Learning Objective 1) Keys to making short-term...Ch. 8 - (Learning Objective 2) Which is true of...Ch. 8 - (Learning Objective 3) Which of the following...Ch. 8 - Prob. 5QCCh. 8 - Prob. 6QCCh. 8 - (Learning Objective 4) A segment margin is the a....Ch. 8 - (Learning Objective 5) When resources are...Ch. 8 - (Learning Objective 6) Which of the following is...Ch. 8 - Prob. 10QC
Ch. 8 - Determine relevance of information (Learning...Ch. 8 - Prob. 8.2SECh. 8 - Prob. 8.3SECh. 8 - Prob. 8.4SECh. 8 - Prob. 8.5SECh. 8 - Prob. 8.6SECh. 8 - Prob. 8.7SECh. 8 - Prob. 8.8SECh. 8 - Product mix decision: Unlimited demand (Learning...Ch. 8 - Prob. 8.10SECh. 8 - Outsourcing production decision (Learning...Ch. 8 - Relevant information for outsourcing delivery...Ch. 8 - Prob. 8.13SECh. 8 - Prob. 8.14SECh. 8 - Prob. 8.15SECh. 8 - Determine relevant and irrelevant information...Ch. 8 - SUSTAINABILITY ES-17A Sustainability and...Ch. 8 - Prob. 8.18AECh. 8 - Prob. 8.19AECh. 8 - Analyze special order decision (Learning Objective...Ch. 8 - Prob. 8.21AECh. 8 - Prob. 8.22AECh. 8 - Prob. 8.23AECh. 8 - Discontinuing a product line (Learning Objective...Ch. 8 - Prob. 8.25AECh. 8 - Determine product mix for retailertwo stocking...Ch. 8 - Prob. 8.27AECh. 8 - Make-or-buy product component (Learning Objective...Ch. 8 - Prob. 8.29AECh. 8 - Prob. 8.30AECh. 8 - Prob. 8.31AECh. 8 - Prob. 8.32BECh. 8 - Prob. 8.33BECh. 8 - Prob. 8.34BECh. 8 - Prob. 8.35BECh. 8 - Prob. 8.36BECh. 8 - Prob. 8.37BECh. 8 - Prob. 8.38BECh. 8 - Prob. 8.39BECh. 8 - Prob. 8.40BECh. 8 - Identify constraint, then determine product mix...Ch. 8 - Determine product mix for retailertwo stocking...Ch. 8 - Prob. 8.43BECh. 8 - Prob. 8.44BECh. 8 - Prob. 8.45BECh. 8 - Determine maximum outsourcing price (Learning...Ch. 8 - Prob. 8.47BECh. 8 - Prob. 8.48APCh. 8 - Special order decision and considerations...Ch. 8 - Prepare and use contribution margin statements for...Ch. 8 - Product mix decision under constraint (Learning...Ch. 8 - Outsourcing decision given alternative use of...Ch. 8 - Prob. 8.53APCh. 8 - Prob. 8.54BPCh. 8 - Prob. 8.55BPCh. 8 - Prepare and use contribution margin statements for...Ch. 8 - Prob. 8.57BPCh. 8 - Prob. 8.58BPCh. 8 - Prob. 8.59BPCh. 8 - Decide whether to discontinue a department...Ch. 8 - Prob. 8.61ACTCh. 8 - Outsourcing Decision at a Real Company Go to the...Ch. 8 - Prob. 8.63ACTCh. 8 - Prob. 8.64ACT
Knowledge Booster
Similar questions
- BlancFace operates an Adirondack Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. Investors would like to earn a 15% return on investment on the company's $257,020,000 of assets. The company primarily incurs fixed costs to groom the runs and operate the lifts. BlancFace projects fixed costs to be $30,150,000 for the ski season. The resort serves about 691,000 skiers and snowboarders each season. Variable costs are about $12 per guest. Currently, the resort has such a favorable reputation among skiers and snowboarders that it has some control over the lift ticket prices.If other resorts in the area charge $106 per day, what price should BlancFace charge? Round the final lift ticket price to the nearest dollar.BlancFace Fixed Costs Plus: Total Variable Costs TOTAL COSTS Plus: Desired Profit TARGET REVENUE Divided by: Numbers of skiers/snowboarders PRICE PER LIFT TICKETarrow_forwardEric Krassow's firm is about to bid on a new radar system. Although the product uses new technology, Krassow believes that a learning rate of 75% is appropriate. The first unit is expected to take 700 hours, and the contract is for 40 units. What is the total amount of hours to build the 40 units?arrow_forwardTriad Children's Center (TCC), a non-profit organization, uses relevant cost analysis to determine whether new services are desirable. TCC is looking at adding a new educational program for grade school children who are having difficulty with their reading and math skills. The following relevant costs are expected if the program is accepted: Costs (per year) Program Director salary $ 39,000 Part-time Assistants $ 28,000 Variable cost per child $ 900 TCC estimates that a maximum of 40 children will participate in this program in the first year. If TCC decides to implement this program, funding will be received from the City Chamber of Commerce ($50,000) and a local Private University Endowment Fund ($35,000). Calculate the expected surplus or deficit from operations given the above information.arrow_forward
- Flyingbird Learning Ltd. is a company located in Virginia. The company develops online training platforms for corporate clients and provides content support on a subscription basis. Suppose during the summer, you started a part-time job at this company. The company is considering upgrading the computers used by its graphic design department. The five computers being replaced cost $12,000 two years ago and now have a net book value of $4,000 based on using straight-line depreciation, a three-year useful life, and $0 salvage value. Your analysis indicates that you can likely get about $500 per computer if you advertise them online. The new computers being considered will cost $15,000 in total and will also have a three-year useful life, with an estimated salvage value of $0. The new computers each include annual licences for graphic design software for which the company is currently paying a total of $500 per year, per computer. Required: a) You prepared an analysis of the financial…arrow_forwardYou work for a power distribution company with a large regional presence Every year your team spends $420000 per year on inspection of wooden poles in mid-west of Western Australa Assume your corporate real discount rate is 6%. Perform your calculations in real terms Assume the conventions for when, in time, investment is made and annual costa are charged that have been used in the GENGS807 pre-work materials and workahop. E.g capital is invested at Ime zero a) What is the net present cost over the next 5 years of continuing to inspect the wooden poles?: Express your answer in milions of $ to 3dp and do not put a S symbol in your answer. b) You are reviewing a capital investment proposal to replace wooden poles with metal poles. It is anticipated that these metal poles will only require inspection once every 5 years. So the first inspection is in year 5 of the cost model. : What is the net present cost over the next 5 years of replacing all the wooden poles in the mid-west if the…arrow_forwardPrepare the financial section of a business case for the Cloud-Computing Case that is listed above this assignment in Canvas. Assume that this project will take eight months to complete (in Year 0) and will cost $600,000. The costs to implement some of the technologies will be $300,000 for year one and $200,000 for years two and three. Estimated benefits will start in year 1 at$400,000 and will be $600,000 for years 2 and 3. There is no benefit in year 0. Use the business case spreadsheet template (business_case_financials.xls) template provided below this assignment in Canvas to calculate the NPV, ROI, and the year in which payback occurs. Assume a 7 percent discount rate for the template. notes* Payback occurs in the first year that there is a positive value for cumulative benefits - costs. (*Negative values are presented in parenthesis) Financial Analysis for Project Name Created by: Date: Note: Change the inputs, shown in green below (i.e. interest rate, number of…arrow_forward
- Winter Sports operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season Investors would like to earn a 17% return on the company's $115 million of assets. The company incurs primarily fixed costs to groom the runs and operate the lifts. Winter Sports projects fixed costs to be $44,000,000 for the ski season. The resort serves 775,000 skiers and snowboarders each season Variable costs are $7 per guest Currently, the resort has such a favorable reputation among skiers and snowboarders that it has some control over the lift ticket prices 1. Would Winter Sports emphasize target costing or cost-plus pricing Why? 2 If other resorts in the area charge $66 per day, what price should Winter Sports charge? 1. Would Winter Sports emphasize target costing or cost-plus pricing Why? Winter Sports should emphasize a approach to pricing because it has been able to differentiate its ski resort from others in the area. Because of its favorable…arrow_forwardPrepare the financial section of a business case for the Cloud-Computing Case that is listed above this assignment in Canvas. Assume that this project will take eight months to complete (in Year 0) and will cost $600,000. The costs to implement some of the technologies will be $300,000 for year one and $200,000 for years two and three. Estimated benefits will start in year 1 at $400,000 and will be $600,000 for years 2 and 3. There is no benefit in year 0. Use the business case spreadsheet template (business_case_financials.xls) template provided below this assignment in Canvas to calculate the NPV, ROI, and the year in which payback occurs. Assume a 7 percent discount rate for the template. notes* Payback occurs in the first year that there is a positive value for cumulative benefits - costs. (*Negative values are presented in parenthesis) What I have so far is attached I need to make it so Pay back occurs in year 3 where there is positive cumulative benefits - costs.arrow_forwardJigSaw Puzzle Company is a chain of 10 retail stores that sell puzzles. In order to more efficiently process and record sales, they are considering the purchase of a point-of-sale system. You have been asked to perform the cost-benefit analysis for this new system. The system will provide annual salary savings of $200,000 for each year of the system's 7-year life. The firm's cost of capital is 12%. The system development cost is projected to be $350,000. Annual operating costs (other than salaries) will rise by $60,000 if we implement the new system. The following factors are for 12%, and 7 years: Present value of a lump sum 0.452 Present value of an annuity 4.564 REQUIRED: Using net present value analysis, evaluate the economic feasibility of the proposed system. Your analysis in #1 above deals with only one aspect of feasibility. Briefly explain other aspects of feasibility that should be considered before a final…arrow_forward
- You own a winter ski resort that earns a 21% return on its assets. An opportunity to purchase a winter ski equipment manufacturer is offered to you. This manufacturer earns a 14% return on its assets. The industry return for competitors of this manufacturer is 9%. Do you purchase this manufacturer?arrow_forwardSusan Wilson operates a popular summer camp for elementary school children. Projections for the current year are as follows: Sales revenue $7,620,000 Operating income $670,250 Average assets $3,824,000 The camp's weighted-average cost of capital is 11%, and Susan requires that all new investments generate a return on investment of at least 15%. The camp's current tax rate is 30% At last week's advisory board meeting, Susan told the board that she had up to $70,000 to invest in new facilities at the camp and asked them to recommend some projects. Today the board's president presented Susan with the following list of three potential investments to improve the camp facilities. Playground Swimming Pool Gym Incremental operating income $1,690 $6,930 $3,910 Average total assets. 13,000 38,500 23,000arrow_forwardSnowDreams operates a Rocky Mountain ski resort. The company is planning its lift ticket pricing for the coming ski season. Investors would like to earn a 15% return on the company's $115 million of assets. The company incurs primarily fixed costs to groom the runs and operate the lifts. SnowDreams projects fixed costs to be $43,500,000 for the ski season. The resort serves 900,000 skiers and snowboarders each season. Variable costs are $10 per guest. Currently, the resort has such a favorable reputation among skiers and snowboarders that it has some control over the lift ticket prices. 1. Would SnowDreams emphasize target costing or cost-plus pricing. Why? 2. If other resorts in the area charge $66 per day, what price should SnowDreams charge? 1. Would SnowDreams emphasize target costing or cost-plus pricing. Why? SnowDreams should emphasize a favorable reputation, managers will have are willing to pay approach to pricing because it has been able to differentiate its ski resort from…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:9781337514835
Author:MOYER
Publisher:CENGAGE LEARNING - CONSIGNMENT