X or impeuve the alecatod fised costs $5,000. Assume thar Btsct iscresse the pri
ID: 2517326 • Letter: X
Question
X or impeuve the alecatod fised costs $5,000. Assume thar Btsct iscresse the price of predu -tion pricess to ncrease peefhab lity What shall ?lea do about product X7 Drop the product in the short semm and koep it in the long term Keep the peoduct in the shot term and drop it in the long e Keep the product beth in the shont sem and in the long sem D. Drop the product both in the short tenn and in the long ter E. Do nothing-uprofiable products are just one of the costs of doing bunines Questions 7-8: The s to have o 20% of est month's sales ending 7. Compute badgeted production for Jully B. 1,040 1200 1,360 A not enough information 240 E. soo -ofthe sale and 25% of "ales the following- 9,You collect 75% of a month's sales Compute cash inflows for June May sales:$2000- June sales: $2,800-15 uly sales:$2400 A. not enough information, because sales revenue differs rom cash inflows B5700 2.100 $2,600 E $2,700 company's engineering department (engineers develop new products)? A. Advertising costs incurred to increase the sales of new products Number of direct labor hours used in manufacturing Number of new product designs Number of production setops E Bodh A and CExplanation / Answer
Answer 6
Since the product X is yielding contribution margin of $ 6,000, it is not correct to drop the product now beacuse fixed cost cannot be avoided in short run.
The company should continue the product for short term & drop in the long run to avoid fixed cost.
Answer 7 & 8
Closing Inventory for June & Opening Inventory for July = 20% Budgeted Sales for July = 20% of 1,200 = 240
Closing Inventory for July & Opening Inventory for August = 20% Budgeted Sales for August = 20% of 2,000 = 400
Budgeted Production for July = Sales + Ending Inventory - Beginning Inventory = 1200+400-240 = 1,360
Ending Inventory for August = Opening + Production - Sales = 400 + 1900 - 2000 = 300
Answer 9
Cash inflows for June:
June July August Desired Ending Inventory 240 400 300 Beginning Inventory 240 400 Budgeted Sales 1,200 2,000 Budgeted Production 1,360 1,900Related Questions
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