Company X manufactures and sells 2 products: Product AA and product BB. The company sells these products in bundles, each containing 2 units of AA and 3 units of BB. The following data is available:

Product AA

• selling price: $25/unit
• variable cost: $20/unit

Product BB

• selling price: $45/unit
• variable cost: $35/unit

Other costs:

• Fixed manufacturing cost: $250000
• Fixed general cost: $150000
• Income taxes at a rate of 25%

The company has a target after tax net income of $300000. How many bundles does the company need to sell in order to achieve this target?

What are two ways of reducing the negative aspects associated with using absorption costing to evaluate the performance of a plant manager?

Company X presents the following information:

• Sales = 2000 units
• Actual production = 1200 units
• Budgeted production = 1000 units
• Fixed manufacturing costs = $ 318213,7

What will

be the Production Volume Variance of Company X, in absorption costing and in

variable costing?

• Negative PVV = favourable adjustment to cogs (cogs decreases)
• Positive PVV = unfavourable adjustment to cogs (cogs increases)

Company

X presents the following information:

• Fixed

  costs = $15000

• Break-even

  sales = $60000

The following information is available fro Company X:

• The company uses an absorption costing system
• The company has failed to reach its planned activity level during its first 2 years of operation
• Revenues and costs are constant across the three years in consideration
• Income has been positive in both Year 1 and Year 2

Company X's gross margin for Year 3 should be ______________.

Company X manufactures and sells a single product. The following data is available for Year 1:

• Projected annual revenues $7500000 (7.5 million)
• Cost of merchandise 20% of revenue
• Sales commissions 3% of revenue
• Shipping expenses 7% of revenue
• Annual fixed marketing expenses $710116
• Annual administrative expenses $1809410

The company’s margin of safety in terms of revenues is:

Please consider the following costs:

1. Depreciation on the packaging machines in a manufacturing company
2. Depreciation on the computer equipment used by the administrative department
3. Lettuce and tomatoes purchased for resale by a retailer company
4. Salaries of the marketing department in a service company

Which of these costs are inventoriable costs?

If the contribution margin ratio is 0.25, targeted operating income is $39169, and targeted sales volume in dollars is $250000, then total fixed costs are:

A local accounting firm employs 20 full-time professionals. The budgeted annual compensation per employee is $40247. The average chargeable time is 500 hours per client annually. All professional labor costs are included in a single direct-cost category and are allocated to jobs on a per-hour basis.

Other costs are included in a single indirect-cost pool, allocated according to professional labor-hours. Budgeted indirect costs for the year are $787500, and the firm expects to have 90 clients during the coming year.

If ten clients are lost and the workforce stays at 20 employees, then the direct labor cost rate per hour is:

Company Ex incurred fixed manufacturing costs of $16000 during 20x4. Other information for 20x4 includes: