Question

In: Accounting

As a direct result of your committee's work, quality significantly improved during the latest year while...

As a direct result of your committee's work, quality significantly improved during the latest year while costs and rework decreased. Titan Computer Company also reduced manufacturing capacity because of lowered rework support needs. Sales of AllPad have increased in tandem with a decrease in unit price (following the intent to increase market share). Information about the current period (2016) and prior period (2015) follows. Type of Data 2015 2016 Units of AIIPad produced and sold 800 900 Selling price $450 $430 Pounds of direct material used 3,200 3,300 Direct material cost per pound $35 $35 Manufacturing capacity in units 12,000 11,000 Total conversion costs $1,800,000 $1,650,000 Conversion cost per unit of capacity $150 $150 Selling and customer service capacity customers 90 customers Total selling and customer service costs $495,000 $495,000 Selling and customer service capacity cost and customer $500 $550 Assuming Titan had 70 customers in 2015 and 80 customers in 2016, 1. calculate the operating income of Titan for 2015 and 2016; Particulars 2015 2016 Revenue; 800*450;900*430 360,000 387,000 Direct Material Cost 3200*35;3300*35 112,000 115,500 Conversion Cost 1,800,000 1,650,000 Selling and Customer Service cost 495,000 495,000 Total Cost 2,407,000 2,260,500 Profit/Loss (2,047,000) (1,873,500) Hence, the operating loss for 2015 is $2,047,000 and 2016 is 1,873,500 2) calculate the growth, price recovery, and productivity components that explain the change in operating income from 2015 and 2016; and comment on your answer. What do these components indicate?

I need help with #2

Solutions

Expert Solution

Comments: Analysis of these components indicate that there is no much effect on the conversion and selling costs as the per unit rate remains the same. But the revenue is comparatively less even though the per unit rate increased as the sales units were comparatively lesser. Change in operating income as per the growth and price recovery component are adverse whereas under the productivity component it is favourable.


Related Solutions

The direct-manipulation systems have significantly evolved overtime, discuss some latest applications that benefit from using direct-manipulation...
The direct-manipulation systems have significantly evolved overtime, discuss some latest applications that benefit from using direct-manipulation interfaces. Support your answer with suitable examples.
The direct-manipulation systems have significantly evolved overtime, discuss some latest applications that benefit from using direct-manipulation...
The direct-manipulation systems have significantly evolved overtime, discuss some latest applications that benefit from using direct-manipulation interfaces. Support your answer with suitable examples. Post your responses, examples, ideas, and discussions on this topic
The direct-manipulation systems have significantly evolved overtime, discuss some latest applications that benefit from using direct-manipulation...
The direct-manipulation systems have significantly evolved overtime, discuss some latest applications that benefit from using direct-manipulation interfaces. Support your answer with suitable examples.
Design an Engagement Plan for your patients and their families that will result in improved clinical...
Design an Engagement Plan for your patients and their families that will result in improved clinical outcomes, greater engagement (i.e. shared decision making) and financial performance. The paper should include the following at a minimum: assessment of the need or opportunity, i.e. what is the need being addressed? Why is the need there? readiness for change, i.e. why the need for change? Why this, now? identification of goals and resource needs, i.e. roles, functions, systems, dollars needed selection of performance...
Avoiding your exposure to tobacco in the following form will result in significantly reduced risk of...
Avoiding your exposure to tobacco in the following form will result in significantly reduced risk of cardiovascular disease. 1. cigarettes 2. smokeless tobacco 3. secondhand smoke 4. all answers choices are correct
Please show work. Calculate the following for the National Beverage Corp. (for the latest year listed)...
Please show work. Calculate the following for the National Beverage Corp. (for the latest year listed) You can use https://www.nasdaq.com/symbol/fizz/financials a)Long term debt ratio, b)Total debt ratio c) Debt-to-equity ratio
The direct labor efficiency variance could be the result of? Choose one and defend your answer....
The direct labor efficiency variance could be the result of? Choose one and defend your answer. 1. Quality of Raw Materials 2. All of the other answers are correct 3. Maintenance of Equipment 4. Training of Employees
Evaluate your team/project experience during this class. How could you have improved teamwork and collaboration? Are...
Evaluate your team/project experience during this class. How could you have improved teamwork and collaboration? Are there ways you would have approached a project of this magnitude differently if you did it again? Create a "User's Guide" of 3 to 5 pages where you advise future teams on how to maximize their success on an audit. Be creative!
During a certain year, the rate of interest on a British deposit was 12 percent while...
During a certain year, the rate of interest on a British deposit was 12 percent while the same on a U.S. deposit was 8 percent. This motivated a few big U.S. investors to invest in British deposits. However, after a year, the U.S. investors received lower rates of return on the British deposits compared to the U.S. deposits. Explain two possible reasons for this outcome
Ash Company incurred direct materials costs of $1,600,000 during the year. Direct Labor costs were $600,000....
Ash Company incurred direct materials costs of $1,600,000 during the year. Direct Labor costs were $600,000. Manufacturing overhead was applied at the rate of 70% of direct labor costs. What were Ash Company’s total manufacturing costs for the year? Superior Painting Company has the following production data for January: · Beginning work in process, 0 units · Units transferred out, 35,000 · Units in ending work in process, 10,000, which are 45% complete for conversion costs Materials are added only...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT