Question 2 Austin Co. manufactures large valves for industrial use. The VP for marketing concluded from...

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Question 2 Austin Co. manufactures large valves for industrial use. The VP for marketing concluded from market analysis that sales were dwindling for Atlanta's valves due to aggressive pricing by competitors. Atlanta's valve sells for $1,500 whereas the competition's comparable valve sells for $1,200. Jane determined that a price drop to $1,200 would be necessary to retain market share and annual sales of 3,000 valves. Cost data based on sales of 3,000 valves: Budgeted Quantity Actual Actual Quantity Costs Direct Materials (pound) 50,000 48,000 $960,000 Direct Labor (hours) 90,000 80,000 $720,000 Machine Setup (# of setups) 23,000 24,000 Assembly (machine hours) 37,000 36,000 $840,000 $540,000 Required: a) The current cost per unit based on actual data is : b) The current profit per unit based on actual data is: c) If the current level of profit dollar per unit is maintained, the target cost per unit is: d) In order to reduce costs so as to reach the desired target cost, the company should also focus on reducing the cost of what manufacturing costs: For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS = = = Paragraph Arial 14px x X2 >IT IT < CH > * (1) - A I. x0 a 952 + ABC V r IT 99 BB + Question 2 Austin Co. manufactures large valves for industrial use. The VP for marketing concluded from market analysis that sales were dwindling for Atlanta's valves due to aggressive pricing by competitors. Atlanta's valve sells for $1,500 whereas the competition's comparable valve sells for $1,200. Jane determined that a price drop to $1,200 would be necessary to retain market share and annual sales of 3,000 valves. Cost data based on sales of 3,000 valves: Budgeted Quantity Actual Actual Quantity Costs Direct Materials (pound) 50,000 48,000 $960,000 Direct Labor (hours) 90,000 80,000 $720,000 Machine Setup (# of setups) 23,000 24,000 Assembly (machine hours) 37,000 36,000 $840,000 $540,000 Required: a) The current cost per unit based on actual data is : b) The current profit per unit based on actual data is: c) If the current level of profit dollar per unit is maintained, the target cost per unit is: d) In order to reduce costs so as to reach the desired target cost, the company should also focus on reducing the cost of what manufacturing costs: For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). BIUS = = = Paragraph Arial 14px x X2 >IT IT < CH > * (1) - A I. x0 a 952 + ABC V r IT 99 BB +

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Answer a The current cost per unit based on actual data can be calculated by adding up all the actua... View the full answer