Sandra owns a small manufacturing company, Tamarisk Camping Stuff Co. The company has been working to perfect a lightweightplastic material to be used for a variety of camping products. Sandra plans to enter the marketplace with a durable, lightweight foldingtable. Similar tables regularly sell for $39-$44 for a 6-foot table, so Sandra realizes that she'll have to stay within that range. Shebelieves her table could sell on the higher end of this range, however, so she is using a target selling price of $44 for planning purposes.Sandra needs to generate an ROI of at least 20% on her invested assets to make this worthwhile in the long term. Her invested assetsare $800,000, and she expects to sell 5,000 tables in her first year of activity.(a)Calculate the target cost for one table.Target cost for one table$(b1)eTextbook and MediaText12Attempts: 1 of 1 usedIf the SG&A portion of that unit cost is estimated to be $7, how much does that leave for the product cost per unit?Product cost$

Target cost is the difference between target sales revenue and target desired return on investment.…

Answered: Sandra owns a small manufacturing…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Linda owns a small manufacturing company, Swifty Camping Stuff Co. The company has been working to perfect a lightweight plastic material to be used for a variety of camping products. Linda plans to enter the marketplace with a durable, lightweight folding table. Similar tables regularly sell for $41-$46 for a 6-foot table, so Linda realizes that she'll have to stay within that range. She believes her table could sell on the higher end of this range, however, so she is using a target selling price of $46 for planning purposes. Linda needs to generate an ROI of at least 15% on her invested assets to make this worthwhile in the long term. Her invested assets are $540,000, and she expects to sell 4,050 tables in her first year of activity. (a) Calculate the target cost for one table. Target cost for one table $ T.
Susan plans on selling her mugs. She has created two scenarios and wants to know which will provide her the better profit. In order to help her figure this out, she asks you to figure out when the two options are the same. Option 1: Sells at a local store. It costs her $445 for a shelf at the store, but it's in an upscale neighborhood that gets lots of foot traffic so she can sell the mugs for $30 in profit. Option 2: Sell at the local farmers market. It costs her $100 for a booth, but busy can vary quite a bit. She figures she call sell the mugs for a $7 profit. When are the two options the same?
Kimberly wants to use her knitting skills to make a little extra money so she can enjoy a theatre weekend with her besties. She's got the pattern down for a hat, scarf, and mittens, but she realizes that her available time is limited. She should be able to sell as many of any item as she can make (they all sell for $14), but she wants to make sure she's making the best use of her time. See below for cost and time information. Time (minutes) Cost of yarn (per unit) Hat Scarf 20 $5 $7 30 Mittens Contribution margin per minute $ 40 $3 Calculate the contribution margin per unit of the scarce resource for each item. (Round answers to 2 decimal places, e.g. 15.25.) Hat $ Scarf Which item should Kimberly focus on in order to maximize her profitability and resources? $ Mittens
The twig stands are more popular, so Bobby sells four twig stands for every one oak stand. Katie charges her husband $400 to share her booth at the craft shows (after all, she has paid the entrance fees). How many of each plant stand does Bobby need to sell to breakeven? Will this affect the number of scarves Katie needs to sell to breakeven? Explain. Bobby Arthur admired his wife's success at selling scarves at local crafts shows, so he decided to make two types of plant stands to sell at the shows. Bobby makes twig stands out of downed wood from his backyard and the yards of his neighbors, so his variable cost is minimal (wood screws, glue, and so forth). However, Bobby has to purchase wood to make his oak plant stands. His unit prices and costs are as follows: E(Click the icon to view the data.) Determine how many of each plant stand Bobby needs to sell to breakeven. Begin by computing the weighted-average contribution margin per unit. First identify the formula labels, then…
Bradley Nowell works as a purchaser at Louie Dog Industries. He is in charge of purchasing dog beds from manufacturers. Bradley's mother, seeing an opportunity, starts a dog bed manufacturing company and quickly receives almost all of Louie Dog's orders. In order to fill the orders, Bradley's mother buys low-quality beds from another dog bed supplier and sells those to Louie Dog for a substantial markup. In fact, the price charged to Louie Dog is twice what other manufactures would charge the company. What type of scheme is this? Pay-and-return Non-accomplice vendor Pass-through Inventory-markup
Alyssa Stuart is thinking of starting a store that specializes in handmade Viennese style bentwood chairs. Before opening her store, Alyssa is curious about how her profit, revenue, and variable costs will change depending on the amount she charges for the chairs. Alyssa would like you to perform the work required for this analysis and has given you the data. Here are a few things to consider while you perform your analysis: Current competitive prices for Viennese style bentwood chairs are between $225 and $275 a chair. Variable costs will be either $100 or $150 a chair depending on the types of material Alyssa chooses to use. Fixed costs are $10,000 a month. Create an Excel file containing the following information: Alyssa's chairs - Price One Alyssa's chairs - Price Two Chair Price $ 225 Chair Price $ 275 Variable Cost per chair $ 125 Variable Cost per chair $ 150 Fixed Cost $ 10,000 Fixed Cost $…
Imagine you are a manager of a snack food company. You need to decide whether you should manufacture a new mozzarella cheese curl or purchase it from another manufacturer and re-sell it to your customers. Consider the details below: You've already spent $150,000 on research and development costs to produce this new product in house. • Whether you manufacturer the cheese curl or buy from another manufacturer, you plan to support this new product with $75,000 in advertising and promotions. • If you decide to manufacturer the product, you would need to hire a line manager ($60,000 annual salary) Whether you manufacturer the cheese curl or buy from another manufacturer, you would still need to pay rent on the factory ($$72,000 annually) If you decide to manufacturer the product, raw materials and packaging would cost $0.50 per bag. • If you purchase or manufacture the product, you would need to pay a sales representative $0.05 per bag in sales commissions. If you purchased the product…
Adriana Alvarado has decided to purchase a personal computer. She has narrowed the choices to two: Drantex and Confiar. Both brands have the same processing speed, 6.4 gigabytes of hard-disk capacity, two USB ports, a DVD drive, and each comes with the same basic software support package. Both come from mail-order companies with good reputations. The selling price for each is identical. After some review, Adriana discovers that the cost of operating and maintaining Drantex over a three-year period is estimated to be $300. For Confiar, the operating and maintenance cost is $600. The sales agent for Drantex emphasized the lower operating and maintenance costs. The agent for Confiar, however, emphasized the service reputation of the product and the faster delivery time (Confiar can be purchased and delivered one week sooner than Drantex). Based on all the information, Adriana has decided to buy Confiar. Required: 1 What is the total product purchased by Adriana? 2. How does the strategic…
Natalie is thinking of buying a van that will be used only for business. The cost of the van is estimated at $36,500. Natalie would spend an additional $2,500 to have the van painted. In addition, she wants the back seat of the van removed so that she will have lots of room to transport her mixer inventory as well as her baking supplies. The cost of taking out the back seat and installing shelving units is estimated at $1,500. She expects the van to last about 5 years, and she expects to drive it for 200,000 miles. The annual cost of vehicle insurance will be $2,400. Natalie estimates that at the end of the 5-year useful life the van will sell for $7,500. Assume that she will buy the van on August 15, 2023, and it will be ready for use on September 1, 2023. Natalie is concerned about the impact of the van’s cost on her income statement and balance sheet. She has come to you for advice on calculating the van’s depreciation. Instructions (a) Determine the cost of the van. (b) Prepare…
Natalie is thinking of buying a van that will be used only for business. The cost of the van is estimated at $36,500. Natalie would spend an additional $2,500 to have the van painted. In addition, she wants the back seat of the van removed so that she will have lots of room to transport her mixer inventory as well as her baking supplies. The cost of taking out the back seat and installing shelving units is estimated at $1,500. She expects the van to last about 5 years, and she expects to drive it for 200,000 miles. The annual cost of vehicle insurance will be $2,400. Natalie estimates that at the end of the 5-year useful life the van will sell for $7,500. Assume that she will buy the van on August 15, 2023, and it will be ready for use on September 1, 2023. Natalie is concerned about the impact of the van’s cost on her income statement and balance sheet. She has come to you for advice on calculating the van’s depreciation. Instructions (a) Determine the cost of the van. (b) Prepare…
Mastura has a small frozen food business. She prepares semi-cooked, frozen foods like popiah, samosa and pau to be sold to retail outlets throughout Perak. Recently, she is deciding to add a new line of product to her existing ones. Each alternative product line requires her to purchase a special machine to prepare the foods. How well she sells this new product depends on the price of seafood this year. Below is the payoff table Mastura has prepared showing her revenue per month. Calculate the expected value and advice Mastura which equipment will give her the most projected revenue. Seafood Prices Stable Reduce 0.25 Increase Equipment Slab Mixer Yule Grinder Mini Mill Mason Till 0.25 RM 2,200 RM 3,100 RM 1,900 RM 4,312 0.50 RM 11,800 RM 9,750 RM 10,730 RM 8,490 RM 15,200 RM 17,400 RM 12,960 RM 13,910 2.
Curtis Parker admired his wife's success at selling scarves at local crafts shows, so he decided to make two types of plant stands to sell at the shows. Curtis makes twig stands out of downed wood from his backyard and the yards of his neighbors, so his variable cost is minimal (wood screws, glue, and so forth). However, Curtis has to purchase wood to make his oak plant stands. His unit prices and costs are as follows: Twig Stands Oak Stands Sales price. . . . . . . . . . . . . $13.00 $30.00 Variable cost. . . . . . . . . . . $2.50 $7.00 The twig stands are more popular, so Curtis sells four twig stands for every one oak stand. Jennifer charges her husband $455 to share her booth at the craft shows (after all, she has paid the entrance fees). How many of each plant stand does Curtis need to sell to breakeven? Will this affect the number of scarves Jennifer needs to sell to breakeven? Explain I DONT NEED THE FULL ANSWER, JUST WHATS MISSING…

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS