The COVID-19 pandemic has hit Division A's business significantly. Specifically, Division A expects that, in year...
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The COVID-19 pandemic has hit Division A's business significantly. Specifically, Division A expects that, in year 2020, there will be no freezing activity because Division A wants to sell the products as fresh as possible. Division A wants to manufacture the products at a smaller batch each time so there is a 100% increase of set up activities for every product line as below. Pandemic effect on Division A's operation (Year 2020) Tofu Activity Ordering Machine set up Freezing Packaging 25 180 0 13,500 Milk 20 70 0 17,500 Ramen 15 60 0 8,000 If everything else is equal (activity cost allocation rate, direct manufacturing cost and sales revenue for all three products remain the same), provide the annual change of gross margin under ABC for each product and for Division A (i.e., total gross margin under ABC in 2020 minus total gross margin under ABC in 2019). The COVID-19 pandemic has hit Division A's business significantly. Specifically, Division A expects that, in year 2020, there will be no freezing activity because Division A wants to sell the products as fresh as possible. Division A wants to manufacture the products at a smaller batch each time so there is a 100% increase of set up activities for every product line as below. Pandemic effect on Division A's operation (Year 2020) Tofu Activity Ordering Machine set up Freezing Packaging 25 180 0 13,500 Milk 20 70 0 17,500 Ramen 15 60 0 8,000 If everything else is equal (activity cost allocation rate, direct manufacturing cost and sales revenue for all three products remain the same), provide the annual change of gross margin under ABC for each product and for Division A (i.e., total gross margin under ABC in 2020 minus total gross margin under ABC in 2019).
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Related Book For
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts
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