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Question 2 (30 marks) Hi-tech Company sells 400 computer hard-disks which cost data is as follows:...
Question 2
Hi-tech Company sells 400 computer hard-disks which cost data is as follows:
Per Unit
Selling Price $250
Variable costs $150
Fixed costs are $35,000 per month.
Required
|
(a) |
What is Hi-tech Company’s expected contribution per unit? |
|
|
(b) |
Calculate the breakeven sales for Hi-tech Company in $ value and in units per month. |
|
|
(c) |
Recently, new competitors have entered the market of digital products. The sales manager proposes that the selling price of hard-disks will be reduced to $235 as to maintain its existing sales volume per month. Discuss how the sales manager’s proposal affects the margin of safety performance. |
|
|
(d) |
The sales manager would like to pay the salesman on commission basis of $15 per disk sold, rather than on fixed salaries of $6,000 per month. The sales manager is confident that the change will increase sales volume by 15%. Should change be made? |
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Question 2 (30 marks) Hi-tech Company sells 400 computer hard-disks which cost data is as follows:...
Question 2
Hi-tech Company sells 400 computer hard-disks which cost data is
as follows:
Per Unit
Selling
Price
$250
Variable
costs
$150
Fixed costs are $35,000 per month.
Required
(a)
What is Hi-tech Company’s expected contribution per unit?
(b)
Calculate the breakeven sales for Hi-tech Company in $ value and
in units per month.
(c)
Recently, new competitors have entered the market of digital
products. The sales manager proposes that the selling price of
hard-disks will be reduced...
Question 2 (30 marks) Hi-tech Company sells 400 computer hard-disks which cost data is as follows:...
Question 2
Hi-tech Company sells 400 computer hard-disks which cost data is
as follows:
Per Unit
Selling
Price
$250
Variable
costs
$150
Fixed costs are $35,000 per month.
Required
(a)
What is Hi-tech Company’s expected contribution per unit?
(b)
Calculate the breakeven sales for Hi-tech Company in $ value and
in units per month.
(c)
Recently, new competitors have entered the market of digital
products. The sales manager proposes that the selling price of
hard-disks will be reduced...
Question 2 (30 marks) Hi-tech Company sells 400 computer hard-disks which cost data is as follows:...
Question 2
Hi-tech Company sells 400 computer hard-disks which cost data is
as follows:
Per Unit
Selling
Price
$250
Variable
costs
$150
Fixed costs are $35,000 per month.
Required
(a)
What is Hi-tech Company’s expected contribution per unit?
(b)
Calculate the breakeven sales for Hi-tech Company in $ value and
in units per month.
(c)
Recently, new competitors have entered the market of digital
products. The sales manager proposes that the selling price of
hard-disks will be reduced...
Question 2 Hi-tech Company sells 400 computer hard-disks which cost data is as follows: Per...
Question 2
Hi-tech Company sells 400 computer hard-disks which cost data
is as follows:
Per Unit
Selling Price$250
Variable costs$150
Fixed costs are $35,000 per month.
Required
(a)
What is Hi-tech Company’s expected contribution per
unit?
(b)
Calculate the breakeven sales for Hi-tech Company in $ value
and in units per month.
(c)
Recently, new competitors have entered the market of digital
products. The sales manager proposes that the selling price of
hard-disks will be reduced to $235 as...
Question 3 (30 marks) a. (15 marks) The finance director of Hi-Quality Productions (Hi-Q) is reviewing...
Question 3
a.
The finance director of Hi-Quality Productions (Hi-Q) is reviewing
the working capital management of the company. He is particularly
concerned about the laxity in the accounts receivable collection
process. The current credit terms of Hi-Q require customers to
settle their bills within 30 days, but its customers are taking an
average of 60 days to pay their bills. In addition, out of the
total sales of $30m per year, the company suffers bad debts of
$900,000 per...
QUESTION 1 IT Tech Bhd follows the practice of valuing inventory at the Lower of Cost...
QUESTION 1
IT Tech Bhd follows the practice of valuing inventory at the
Lower of Cost or Net Realizable Value (LCNRV). The following
information is available from the company’s inventory records as of
31 December 2018.
Item
Quantity
Cost per Unit (RM)
Estimated selling Price/ Unit (RM)
Completion and Selling Cost /Unit
Speaker
300
65.00
75.50
4.60
Keyboard
550
25.00
33.90
2.80
Pendrive
800
18.00
16.60
0.65
Monitor
230
135.00
142.30
8.70
REQUIRED:
Calculate the LCNRV using the “individual-item” approach....
Bramble Corp. sells two types of computer hard drives. The sales mix is 30% (Q-Drive) and...
Bramble Corp. sells two types of computer hard drives. The sales
mix is 30% (Q-Drive) and 70% (Q-Drive Plus). Q-Drive has variable
costs per unit of $ 150 and a selling price of $ 210. Q-Drive Plus
has variable costs per unit of $ 165 and a selling price of $ 255.
Bramble’s fixed costs are $ 729000. How many units of Q-Drive would
be sold at the break-even point?
9000.
6300.
2700.
3645.
Question 1 (20 marks) Super Electronic Company (Super) manufactures and sells three models of computer chip...
Question 1
Super Electronic Company (Super) manufactures and sells three
models
of computer chip to a customer. Sales revenue and direct costs for
the
third quarter of 2018 are shown as follows:
Model SE-1 SE-2 SE-3
Units produced and sold 8,000 12,000 20,000
Unit selling price $60 $50 $35
Sales revenue $480,000 $600,000 $700,000
Direct materials $140,000 $320,000 $364,000
Direct labour $120,000 $190,000 $168,000
Machine hours consumed 300 hours 90 hours 60 hours
The company adopts a simple costing system...
QUESTION 1 (30 MARKS) Valencia Manufacturing Company manufactures and sells musical gadgets. The business earned Operating...
QUESTION 1
Valencia Manufacturing Company
manufactures and sells musical gadgets. The business earned
Operating Income of $220,000 in 2018, when selling price per unit
was $200, and the president of Valencia is under pressure to
increase operating income in 2019. Data for variable cost per unit
and total fixed costs were as follows:
Variable expenses per unit:
Direct Material
$40
Direct Labour
$32
Variable Manufacturing Overhead
$18
Fixed
expenses:
Fixed Manufacturing Overhead
$190,000
Fixed...
Case Study 2 ( 10 Marks) GEEPAS is an electronic company that worked hard to establish...
Case Study 2 ( 10 Marks)
GEEPAS is an electronic company that worked hard to establish
a place for itself in the market. It serves more 85 countries
across the globe. GEEPAS produce all kind of products ranging from
entertainent products to kitchen appliances and tools.
Mr. Anas is working as head of the marketing department for
GEEPAS electronics. Of course, competing with other electronic
brands like LG, Samsung and other electronic dominated companies is
not an easy task at...
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