Washburn Guitars Case Evaluation Micah Grover There are a few factors that are likely to affect the demand for the lines of Washburn Guitars. Changing the price of the guitars that are sold would affect the demand for Washburn guitars that are bought by first-time guitar buyers. The demand for Washburn guitars will increase if they lower their prices. First-time guitar buyers want good value for the product that they are buying. Lowering the price would not have a significant effect on sophisticated
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15Q^2 + 10Q^3 a) Fixed Cost (doesn’t change depending on output produced) = 100 b) Variable Cost of producing Q = 10 units: 20*10 + 15*10^2 + 10*10^3 = 200 + 1‚500 + 10‚000 = 11‚700 c) Total Cost of producing Q = 10 units: C(10) = 100 + 20*10 + 15*10^2 + 10*10^3 = 11‚800 Alternatively‚ we have Total Costs of Producing Q=10 units = Fixed Costs + Variable Costs of producing Q = 10 units = 100 + 11‚700 = 11‚800 d) Average Fixed Cost = Total Fixed Costs / Output = 100/10 =
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Budgets-P6 a) Fixed costs –Fixed costs are costs that constantly need to be paid by the business even if the business isn’t operating currently. For example this can be rent. Variable costs –Variable costs is costs that changes depending the amount of the level of output or sales by the business. b) Costs need to be controlled because this can cause damage to the business if not controlled‚ the business could exceed their budget generating a negative balance creating no money for hair salon. Also
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Required: a. Variable costs increase if output (or sales) varies; in this case‚ costs associated with processing each passenger is an absolute variable cost since there is $7 cost increase for an additional passenger. Other variable costs are the cost of flight clue and fuel costs‚ since when the number of passenger increase to a capacity that is more than 120 people‚ one additional flight would have an cost increase of $(600+210)/per hour of flying time. Fixed costs remain in constant if output
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variable costs are charged to cost units and the fixed costs attributable to the relevant period is written off in full against the contribution for that period. For contribution‚ is the difference between sales value and the variable cost of those sales‚ expressed either in absolute terms or as a contribution per unit (The Association of Business `Executive‚ 2009). It is assumed that M&S used marginal costing evidence in their financial statement. The proportion variable cost in the cost of sales
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for the year just ended. Estimated Actual Units sold 1‚000 1‚100 Direct labor hours 2‚000 2‚050 Sales Revenue $140‚000 $145‚000 Direct materials cost 30‚000 31‚000 Direct labor cost 20‚000 22‚000 Manufacturing overhead cost 60‚000 62‚000 Selling and administrative costs 20‚000 19‚000 SuperFine uses a normal costing system with direct labor cost as the allocation basis. By how much is manufacturing overhead misapplied? A) $4‚000 underapplied B) $4‚000 overapplied C) $2‚000 underapplied D)
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Simulations: Management Report Industry 3 Company 2: Preset name (please change): Industry 3 Company 2 September 24‚ 2012 Period number 0 1. Company 1.1 Decisions with effect in this period Lean management Payment of dividends 1.2 Results Company fixed costs Total throughput time Single shift Double shift 1.3 Indices Lean management [accumulated value] 350‚000 Euro 600‚000 Euro 70‚000 Euro 2 % 40 days 25 days 2. Sales 2.1 Decisions with effect in this period Product policy Alesa Bordo 200‚000
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Health Cruises Homework 1. What is the minimum number of passengers Health Cruises must sign up by November 20th to break even? *Fixed costs = $220‚000 (Ship rental and crew) + $65‚000(initial advertisement expense) +$10‚000(administrative expense) = $295000 *Contribution per unit = $1500 -$200 = $1300 *Breakeven point (in units)= 295000/1300 = 226.92 : At least 227 passengers should sign up for Health Cruises by November 20th.
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Solution Based on the breakeven analysis the subsidiary is a problem to Prestige. They are currently operating at an average demand of 205 hours per month. They need to operate at 1116.19 hours in order to break even. The additional‚ unexpected costs incurred along with the difficulty in finding customers have resulted in the subsidiary being unprofitable and unsustainable. Without bringing in additional customers to reach their breakeven point they should move forward with closing the subsidiary
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survey for Surenex that has the potential to be a valued long-run client. And the firm willing to pay YSL’s normally billing rates. 2.0 Answer the question (a) The full cost of the Surenex engagement including indirect costs and direct costs. Direct costs consist of travel cost and cost of conducting surveys. In the case‚ direct cost means direct charge is about $3‚000. The professional compensation charges include partner $4‚800 and professional staff $4‚000. Each of engagement receives an allocation
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