1. Birdie Company manufactures and sells dresses at a variable cost of $24 each and a...
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1. Birdie Company manufactures and sells dresses at a variable cost of $24 each and a fixed cost of x. It can sell 6,800 dresses at a selling price of $64 to earn an operating income of $162,000 (Option 1) or it can sell 4,800 dresses at a selling price of $78 and another 3,800 dresses at a selling price of $60 (Option 2). Which alternative should Birdie choose? Option 1 operating income: Option 2 operating income: Birdie should choose Question 2 2. Coste Corporation manufactures and sells a special kind of ball bearing. Its cost structure depends on the number of bearings it produces. Its fixed costs and variable manufacturing cost per unit for different ranges of production are described in the following table: Production Range in Units 1-3,000 units produced $ 3,001-6,000 units produced $ 6,001-10,000 units produced $ Fixed Costs 275,000 375,000 795,000 Variable Manufacturing Cost per Unit 65 40 30 S S $ - Coste's sales director believes the company can sell 2,200 units at a selling price of $370; or 4,700 units at a price of $270; or 7,700 units at a price of $220. If it chose to sell 7,700 units, however, it would incur additional advertising costs of $62,000 and variable selling costs of $12 per unit. Should Coste Corporation plan to produce and sell (a) 2,200 units (b) 4,700 units or (c) 7,700 units? X 1. Birdie Company manufactures and sells dresses at a variable cost of $24 each and a fixed cost of x. It can sell 6,800 dresses at a selling price of $64 to earn an operating income of $162,000 (Option 1) or it can sell 4,800 dresses at a selling price of $78 and another 3,800 dresses at a selling price of $60 (Option 2). Which alternative should Birdie choose? Option 1 operating income: Option 2 operating income: Birdie should choose Question 2 2. Coste Corporation manufactures and sells a special kind of ball bearing. Its cost structure depends on the number of bearings it produces. Its fixed costs and variable manufacturing cost per unit for different ranges of production are described in the following table: Production Range in Units 1-3,000 units produced $ 3,001-6,000 units produced $ 6,001-10,000 units produced $ Fixed Costs 275,000 375,000 795,000 Variable Manufacturing Cost per Unit 65 40 30 S S $ - Coste's sales director believes the company can sell 2,200 units at a selling price of $370; or 4,700 units at a price of $270; or 7,700 units at a price of $220. If it chose to sell 7,700 units, however, it would incur additional advertising costs of $62,000 and variable selling costs of $12 per unit. Should Coste Corporation plan to produce and sell (a) 2,200 units (b) 4,700 units or (c) 7,700 units? X
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Question 1 Question 2 Option 1 a Calculate operating income Sales Revenue 43520000 6800 x 64 Revenue ... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Posted Date:
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