In: Math

A new product will sell for $8. The company expects to sell around 900,000 units. (Use a normal distribution with a mean of 900,000 and a standard deviation of 300,000.) Fixed costs are normally distributed with a mean of $700,000 and a standard deviation of $50,000. Unit variable costs are also normally distributed with a mean of $3 and a standard deviation of $0.25. Selling expenses are lognormally distributed with a mean of $900,000 and a standard deviation of $50,000.

a. What is the expected value of profit for this product?

b. What is the probability that profit will exceed $3 million?

DGT
industries expects to sell 420 units of product a and 420 units of
product b each day at an average price of $18 for product a and $28
for product b . The expected cost for product a is 42% of its
selling price and the expected cost for product b is 58% of its
selling price. DGT industries has no beginning inventory but it
wants to have a six day supply of ending inventory for each
product. Compute...

In 2018, X Company expects to produce and sell 66,000 units of
its only product for $34.73. The following are budgeted variable
costs per unit:
Direct Materials
$5.39
Direct Labor
$5.27
Variable Overhead
$4.31
Variable selling and administrative
$4.32
Total
$19.29
Budgeted fixed overhead for 2018 is $187,440, and budgeted fixed
selling and administrative expenses are $190,740.
What is X Company's budgeted contribution margin rate for
2018?

The Mason Company produces and expects to sell 10,600 units of
its product. Variable selling and administrative expense is $3.70
per unit sold and fixed selling and administrative expense is
$50,000 per month. Included in the $50,000 fixed selling and
administrative expense is a depreciation of $20,000. The budgeted
selling and administrative cash payments for November is:
$69,220.
$39,220.
$39,480.
$89,220.

Question 2
In the coming year, Power Company expects to sell 70,000 units of
product X at RM13 each. Power Controller provided the following for
the coming year.
Units of production 110,000
Direct material per unit RM4.50
Direct labour per unit RM3.00
Variable overhead per unit RM1.50
Variable selling expenses per unit RM1.10
Total fixed overhead RM132,000
Total fixed selling expenses RM30,000
Total fixed administrative expenses RM15,000
Required:
a) Calculate the cost of one unit of product X under absorption...

ABC Manufacturing expects to sell 1,025 units of
product in 2021 at an average price of $100,000 each based on
current demand.
The Chief Marketing Officer forecasts growth of 50
units per year through 2025. The $100,000 price will be constant
for 5 years.
However, ABC cannot produce more than 1,000 units
annually. They must update plant or replace it. If replaced,
initial working capital of $5 million is required. RRR is 14%.
Using excel functions, calculate NPV for both...

ABC Manufacturing expects to sell 1,025 units of
product in 2021 at an average price of $100,000 each based on
current demand.
The Chief Marketing Officer forecasts growth of 50
units per year through 2025. So, the demand will be 1,025 units in
2021, 1,075 units
in 2022, etc. and the $100,000 price will remain
consistent for all five years of the investment life. However, ABC
cannot produce more
than 1,000 units annually based on current
capacity.
In order to...

ABC Manufacturing expects to sell 1,025 units of
product in 2021 at an average price of $100,000 each based on
current demand.
The Chief Marketing Officer forecasts growth of 50
units per year through 2025. So, the demand will be 1,025 units in
2021, 1,075 units
in 2022, etc. and the $100,000 price will remain
consistent for all five years of the investment life. However, ABC
cannot produce more
than 1,000 units annually based on current
capacity.
In order to...

Farrow Co. expects to sell 400,000 units of its product in the
next period with the following results.
Sales (400,000 units)
$
6,000,000
Costs and expenses
Direct materials
800,000
Direct labor
1,600,000
Overhead
400,000
Selling expenses
600,000
Administrative expenses
1,028,000
Total costs and expenses
4,428,000
Net income
$
1,572,000
The company has an opportunity to sell 40,000 additional units at
$13 per unit. The additional sales would not affect its current
expected sales. Direct materials and labor costs per unit...

A company expects to sell 6,000 units in April and expects
sales to increase 20% each month after. The unit sales price of $8
is expected to remain constant. The company wants ending finished
goods inventory to be 15% of the next monthâ€™s sales.
What are budgeted sales revenues for the second quarter?
How many units will be produced in the second quarter? Round
answers to nearest whole number.
The raw materials ending inventory should be 20% of the next...

4. If a company expects to sell 4,500 units, has a DOL of 2 and
a % change in Operating Cash Flow of 22% (positive), how many units
did they actually sell?
a. 400
b. 440
c. 4,440
d. 4,995
e. None of the above
5. Which of the following is FALSE about the
efficient markets hypothesis?
a. EMH implies that the market has already
incorporated characteristics such as dividend policy into its
price.
b. EMH is the idea that actual capital markets, such
as the NYSE, are...

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