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Butoxors [25]
2 years ago
12

Suire Corporation is considering dropping product D14E. Data from the company's accounting system appear below: Sales $ 670,000

Variable expenses $ 295,000 Fixed manufacturing expenses $ 246,000 Fixed selling and administrative expenses $ 194,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $196,000 of the fixed manufacturing expenses and $111,000 of the fixed selling and administrative expenses are avoidable if product D14E is discontinued. Required: a. According to the company's accounting system, what is the net operating income earned by product D14E? (Net losses should be indicated by a minus sign.) b. What would be the financial advantage (disadvantage) of dropping product D14E? Should the product be dropped?
Business
1 answer:
Marina86 [1]2 years ago
3 0

Answer:

a. According to the company's accounting system, what is the net operating income earned by product D14E? (Net losses should be indicated by a minus sign.)

  • net loss -$65,000

b. What would be the financial advantage (disadvantage) of dropping product D14E? Should the product be dropped?

  • financial disadvantage of discontinuing the produce is -$68,000, so the company should not discontinue the product since its losses would increase

Explanation:

total sales $670,000

- variable expenses $295,000

- fixed manufacturing expenses $246,000

- fixed selling and administrative expenses $194,000

net loss = $65,000

if product D14E is discontinued, $196,000 + $111,000 = $307,000, of fixed expenses can be avoided, but $133,000 are not avoidable. if the company discontinues the product, its losses will increase by $133,000 - $65,000 = $68,000

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Answer:

Answer:

Target cost = Market price - Desired profit margin

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                   = $162

Explanation:

Target cost is the difference between competitive market price and desired profit margin. In target costing, the market price is fixed by the market forces. The desired profit margin is deducted from the market price so as to obtain target cost.

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Three years ago, Vincent Chow completed his degree in accounting. The economy was in a depressed state at the time, and Vincent
m_a_m_a [10]

Answer:

Prerequisite 1  

There are three nonexclusive serious techniques:  

Cost Leadership - target showcase exceptionally broad, point is to have the most minimal cost. Items not specific, attempt to speak to shoppers because of their low costs.  

Separation - items or administrations gave elite highlights that clients need, commonly an increasingly devoted specialty. Ready to charge more significant expenses because of these additional highlights.  

Center Strategy - either a cost authority or a separation methodology, yet focused for a tight, engaged market.  

Vincent's business utilizes a Focus Strategy. The Cappuccino Express was made with the conviction that because of individuals' evolving schedules, comfort would be vital – giving speedy and advantageous espresso to occupied individuals.  

Prerequisite 2  

Basic Success Factors are the vital money related and non-monetary proportions of achievement. To be increasingly explicit Critical Success Factors are features of the association's exhibition that are essential to its upper hand.  

The Cappuccino Express Critical Success Factors :  

Quality and cost of existing items  

Areas specific..near Malls , schools , workplaces and so forth.  

Devise new items at customary interims  

Client Turnover – capacity to keep lines short, vehicles traveling through line  

Keeping Loyal clients with quality items along these lines diminishing ad costs  

Giving incredible client support  

Improving Profitability  

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Prerequisite 2  

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Which financial leverage ratio is used with two other ratios to mathematically produce the return on equity ratio?
ipn [44]

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To measure the Return on Equity with 3 ratios, the <em>DuPont Analysis</em> can be used. This is a technique of deconstructing the Return on Equity ratio into various constituent ratios so that their effect on Return on Equity is better know.

The basic DuPont Analysis is;

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Total Assets/ Equity or the Assets to Shareholder Equity ratio is the answer.

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Answer:

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