MaxiDrive manufactures a wide variety of parts for recreational boating, including a gear and driveshaft part...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
MaxiDrive manufactures a wide variety of parts for recreational boating, including a gear and driveshaft part for high-powered outboard boat engines. Original equipment manufacturers such as Mercury and Honda purchase the components for use in large, powerful outboards. The part sells for $696, and sales volume averages 34,000 units per year. Recently, MaxiDrive's major competitor reduced the price of its equivalent unit to $658. The market is very competitive, and MaxiDrive realizes it must meet the new price or lose significant market share. Management has begun paying closer attention to costs and has reconfirmed the current existing standard costs. The controller then assembled the following cost and usage data for the most recent year for MaxiDrive's production of 34,000 units: Budgeted Quantity Direct materials Direct labor Indirect labor Budgeted Cost $ 7,400,000 2,690,000 Actual Quantity Actual Cost $ 7,900,000 3,075,000 2,860,000 Inspection (hours and cost) 1,280 480,000 1,900 2,650,000 440,000 Materials handling (number of purchases and cost) Machine setups (number and cost) 6,200 950,000 4,350 935,000 Returns and rework (number of times and cost) 2,300 480 1,200,000 2,400 1,175,000 170,000 $15,750,000 680 220,000 $16,395,000 Required: 1. Calculate the target cost for maintaining current market share and profitability. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Target cost MaxiDrive manufactures a wide variety of parts for recreational boating, including a gear and driveshaft part for high-powered outboard boat engines. Original equipment manufacturers such as Mercury and Honda purchase the components for use in large, powerful outboards. The part sells for $696, and sales volume averages 34,000 units per year. Recently, MaxiDrive's major competitor reduced the price of its equivalent unit to $658. The market is very competitive, and MaxiDrive realizes it must meet the new price or lose significant market share. Management has begun paying closer attention to costs and has reconfirmed the current existing standard costs. The controller then assembled the following cost and usage data for the most recent year for MaxiDrive's production of 34,000 units: Budgeted Quantity Direct materials Direct labor Indirect labor Budgeted Cost $ 7,400,000 2,690,000 Actual Quantity Actual Cost $ 7,900,000 3,075,000 2,860,000 Inspection (hours and cost) 1,280 480,000 1,900 2,650,000 440,000 Materials handling (number of purchases and cost) Machine setups (number and cost) 6,200 950,000 4,350 935,000 Returns and rework (number of times and cost) 2,300 480 1,200,000 2,400 1,175,000 170,000 $15,750,000 680 220,000 $16,395,000 Required: 1. Calculate the target cost for maintaining current market share and profitability. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Target cost
Expert Answer:
Related Book For
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
Posted Date:
Students also viewed these accounting questions
-
46.A stock is selling for $50 in the market. The company's beta is 1.2, the market risk premium (r M - r F ) is 5%, and the risk-free rate is 6%. The most recent dividend paid is D 0 = $2.0 and...
-
A car dealer will sell you the car for $ 1 6 , 5 7 6 for a down payment of $ 3 4 9 0 and monthly payments of $ 3 3 8 . 5 6 per month for 4 8 months. what is the total amount paid for both car and...
-
MaxiDrive manufactures a wide variety of parts for recreational boating, including a gear and driveshaft part for high-powered outboard boat engines. Original equipment manufacturers such as Mercury...
-
The Ramirez Company current dividend was $1.90. Its dividend will grow by 6%, 7%, 8% and 9% for the first 4 years. And then, dividends to grow at a rate of 5% forever. It's required return is 15%. 1-...
-
The Sampsons are aware that diversification is important. Therefore, they have decided that they will initially invest in one biotechnology mutual fund and then invest in three other biotechnology...
-
Interpret what a score of 90% would mean for the four-firm concentration ratio. What are the shortcomings of concentration ratios as measures of monopoly or oligopoly power?
-
What is communication?
-
New York Waste (NYW) is considering refunding a $50,000,000, annual payment, 14 percent coupon, 30-year bond issue that was issued five years ago. It has been amortizing $3 million of flotation costs...
-
6. A patient is injected with a drug, and t hours later, the concentration of the drug remaining in the patient's bloodstream is given by C(t)=- 31 mg/cm. What is the average concentration of drug...
-
A plant asset acquired on October 1, 2017, at a cost of 4,000,000 has an estimated useful life of 10 years. The residual value is estimated to be 160,000 at the end of the asset's useful life....
-
2. Again, the United States won the 2019 FIFA World Cup, defeating the Netherlands 2 - 0. The ages, in years, of each team's players follow: 26 31 22 20 26 31 United States 28 33 31 30 30 21...
-
What are some strategies companies can use to influence consumer behavior and increase demand for their products or services?
-
In what ways do culturally embedded leadership styles influence cross-cultural collaboration, communication, and conflict resolution within multinational corporations and globalized markets ?
-
Briefly explain how the media source you currently use influence your decision and opinions.
-
What is a behavior-based approach that can reduce the influence of regency bias on evaluations by keeping a running log or inventory of a person's effective and ineffective job behaviors.?
-
elect the accurate difference between the population variance calculation and the sample variance calculation. a. The sample variance has a denominator of N. b. The sample variance has a denominator...
-
Rewrite the code of Figure 7.3 in Ada, Java, or C#. Figure 7.3: template class queue { item items [max_items]; int next_free, next_full, num_items; public: queue () : next_free (0), next_full(0),...
-
EuroVirtuals EPS and Euro Appreciation/ Depreciation. Since its introduction in 2003, the euro has been fluctuating against major global currencies. a. What is the impact of 15% appreciation of all...
-
EuroVirtuals EPS Sensitivity to Exchange Rates (B). Assume a major weather crisis hits Switzerland, reducing its agricultural and food industries and subsequently leading to a macroeconomic...
-
EuroVirtuals Global Taxation and Effective Tax Rate. All MNEs attempt to minimize their global tax liabilities. Return to the original set of baseline assumptions and answer the following questions...
Study smarter with the SolutionInn App