1. 1. Company uses target price. Refer the following information:

Production volume	$601,000 units per unit
Market price	$32 per unit
Desired operating income	15% of total assets
Total Assets	$13,900,000
Variable cost per unit	$20 per unit
Fixed cost per year	$5,600,000 per year

What is the current cost structure, Istanbul can not achieve it is profit goals. It will have to reduce either the fixed cost or the variable cost assuming unit produced are sold.

2. The products are machine made. Three units of product A can be made with one machine hour and two units of product B can be made with one machine hour.

A	B
Sale price per unit	$12.00	$28.00
Variable cost per unit	$10.00	$12.00

The company has maximum of 3,000 machine hours available per month. The company can sell up to 18,000 units of product A per month. And up to 3,000 units of product B for the month. What is the optimum product mix to maximize company’s operating income?

3.  Istanbul company manufactures two products A and B. the following information was provided about the two products:

	A	B
Budgeted sales in units	2700	600
Budgeted selling price	$600	$1,1700
Budgeted contribution margin per unit	$600	$1080
Actual sales in units	3000	1400
Actual selling price	$650	$1,680

What is total sales mix variance? (Round intermediary calculations to two decimals place).

4.  Istanbul company makes special equipment. Each unit sells for $420. Istanbul uses just in time inventory procedure: it produces and sells $12500 units per year. It has provided the following income statement data:

Traditional format		Contribution margin format
Sale revenue	$5,250,000	Sales revenue	$5,250,000
Cost of goods sold	$3,100,000	Variable cost
Gross profit	$2,150,000	Manufacturing	$1,200,000
Selling and admin exp	$670,000	Selling and admin exp	$400,000
		Contribution margin	$3,650,000
		Fixed costs
		Manufacturing	$1,900,000
		Selling and admin	$270,000
Operating income	$1,480,000	Operating income	$1,480,000

A foreign company has offered to buy 110 units for a reduced sales price$250 per unit. The marketing manage says the sale will have no negative impact the company’s regular sales.

The sales manager says that this will not require any additional selling and administrative costs. As it is one time deal. The production manager reports that there is plenty of excess capacity to accommodate the deal without requiring any additional fixed costs.

If Istanbul accepts the deal, how will this impact operating income? (Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar).

5.  Istanbul company makes special kind of product. Variable costs are $221 per unit, and fixed costs are $30,000 per month. Istanbul sells 500 units per month at a sales price of $310. If the quality of the product is upgraded, the company believes it can increase the sales price to $349. If so, the variable cost will increase to $230 per unit. And the fixed costs will rise by 50%. If Istanbul decides to upgrade, how will operating income be affected?

6.  Istanbul company manufactures bikes the company has the capacity to produce 37,000 bikes per year and is currently producing and selling 25,000 bikes per year. The following information relates to current production:

Selling price per unit	$185
Variable costs per unit
Manufacturing	$60
Selling and administrative	$20
Total fixed cost
Manufacturing	$700,000
Selling and administrative	$300,000

If a special pricing is accepted for 5,600 bikes at a sales price of $160 per unit, fixed costs remain unchanged, and there are no variable selling and administrative costs for this order, what is the change in operating income?

7.  Istanbul company used the following data, to evaluate their current operating system. The company sells items for $18 each and used a budgeted selling price of $18 per unit.

	Actual	Budgeted
Units sold	43,000 units	33,000 units
Variable costs	$166,000	$150,000
Fixed costs	$41,000	$58,000

What is the static budgeted variance of operating income?

8.  Istanbul company manufactures two products A and B. the following information was provided about the two products:

	A	B
Budgeted sales in units	2800	640
Budgeted selling price	$600	$1,700
Budgeted contribution margin per unit	$430	$1,050
Actual sales in units	3,000	1,200
Actual selling price	$650	$1,680

What is the total sales volume variance in terms of the contribution margin?

9.  Istanbul company, developed standard costs for direct material and direct labor. In 2021, Ahmet estimated the following standard costs for one their major products.

	Budgeted quantity	Budgeted price
Direct materials	0.40 pounds	$50 per pound
Direct labor	0.50 hours	$11 per pound

During June, Istanbul produced and sold 4,000 products using 1,750 pounds of direct materials at an average cost pound of $48 and 2,090 direct manufacturing labor hours at an average wage of $11.30 per hour.

The direct material manufacturing labor efficiency variance during June is

10.  Istanbul company makes a product. Its basic products require $60 in variable costs and $4,000 per month in fixed costs. Istanbul sells 20 products per month. If the company further processes the product to enhance its functionality. It will require an additional $40 per unit of variable costs, plus an increase in fixed costs of $500 per month. The current sales price of the product is $280. The CEO wishes to improve operating income by $1,200 per month by selling the enhanced version of the product in order to meet this target, the sales price to be changed for the enhanced product is………

Answer rating: 100% (QA)

Lets solve each of the provided questions one by one To determine the current cost structure we need to calculate the total cost and operating income using the given information Total Revenue Producti... View the full answer