Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the investment of $1,300,000 in assets. The costs of producing and selling 5,000 units of flat panel displays are estimated as follows:
|
1 |
Variable costs per unit: |
|
|
2 |
Direct materials |
$119.00 |
|
3 |
Direct labor |
31.00 |
|
4 |
Factory overhead |
49.00 |
|
5 |
Selling and administrative expenses |
36.00 |
|
6 |
Total variable cost per unit |
$235.00 |
|
7 |
Fixed costs: |
|
|
8 |
Factory overhead |
$248,000.00 |
|
9 |
Selling and administrative expenses |
150,000.00 |
Crystal Displays Inc. is currently considering establishing a selling price for flat panel displays. The president of Crystal Displays has decided to use the cost-plus approach to product pricing and has indicated that the displays must earn a 12% return on invested assets.
| Required: | |||||||
| 1. | Determine the amount of desired profit from the production and sale of flat panel displays. | ||||||
| 2. | Assuming that the product cost method is used, determine (a) the cost amount per unit, (b) the markup percentage, and (c) the selling price of flat panel displays.* | ||||||
| 3. | (Appendix) Assuming that the total cost method is used, determine (a) the cost amount per unit, (b) the markup percentage and (c) the selling price of flat panel displays.* | ||||||
| 4. | (Appendix) Assuming that the variable cost method is used, determine (a) the cost amount per unit, (b) the markup percentage, and (c) the selling price of flat panel displays.* | ||||||
| 5. | Comment on any additional considerations that could influence establishing the selling price for flat panel displays. | ||||||
| 6. | Assume that as of August 1,
3,000 units of flat panel displays have been produced and sold
during the current year. Analysis of the domestic market indicates
that 2,000 additional units are expected to be sold during the
remainder of the year at the normal product price determined under
the product cost method. On August 3, Crystal Displays Inc.
received an offer from Maple Leaf Visual Inc. for 1,000 units of
flat panel displays at $223 each. Maple Leaf Visual Inc. will
market the units in Canada under its own brand name, and no
variable selling and administrative expenses associated with the
sale will be incurred by Crystal Displays Inc. The additional
business is not expected to affect the domestic sales of flat panel
displays, and the additional units could be produced using existing
factory, selling, and administrative capacity.
|
In: Accounting
Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the investment of $1,300,000 in assets. The costs of producing and selling 5,000 units of flat panel displays are estimated as follows:
|
1 |
Variable costs per unit: |
|
|
2 |
Direct materials |
$120.00 |
|
3 |
Direct labor |
32.00 |
|
4 |
Factory overhead |
48.00 |
|
5 |
Selling and administrative expenses |
36.00 |
|
6 |
Total variable cost per unit |
$236.00 |
|
7 |
Fixed costs: |
|
|
8 |
Factory overhead |
$254,000.00 |
|
9 |
Selling and administrative expenses |
146,000.00 |
Crystal Displays Inc. is currently considering establishing a selling price for flat panel displays. The president of Crystal Displays has decided to use the cost-plus approach to product pricing and has indicated that the displays must earn a 20% return on invested assets.
| Required: | |||||||
| 1. | Determine the amount of desired profit from the production and sale of flat panel displays. | ||||||
| 2. | Assuming that the product cost method is used, determine (a) the cost amount per unit, (b) the markup percentage, and (c) the selling price of flat panel displays.* | ||||||
| 3. | (Appendix) Assuming that the total cost method is used, determine (a) the cost amount per unit, (b) the markup percentage and (c) the selling price of flat panel displays.* | ||||||
| 4. | (Appendix) Assuming that the variable cost method is used, determine (a) the cost amount per unit, (b) the markup percentage, and (c) the selling price of flat panel displays.* | ||||||
| 5. | Comment on any additional considerations that could influence establishing the selling price for flat panel displays. | ||||||
| 6. | Assume that as of August 1, 3,000 units of flat panel displays
have been produced and sold during the current year. Analysis of
the domestic market indicates that 2,000 additional units are
expected to be sold during the remainder of the year at the normal
product price determined under the product cost method. On August
3, Crystal Displays Inc. received an offer from Maple Leaf Visual
Inc. for 900 units of flat panel displays at $227 each. Maple Leaf
Visual Inc. will market the units in Canada under its own brand
name, and no variable selling and administrative expenses
associated with the sale will be incurred by Crystal Displays Inc.
The additional business is not expected to affect the domestic
sales of flat panel displays, and the additional units could be
produced using existing factory, selling, and administrative
capacity.
|
In: Accounting
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(a) What is the equilibrium price and quantity?
(b) Suppose the city places a $2 tax on hotel rooms. How much do consumers now pay? How much do producers receive? How much tax revenue is raised by the tax?
(c) Based on your answer to part (b) is supply or demand more elastic?
In: Economics
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“When a cold snap hits Florida, the price of orange juice rises in supermarkets throughout the country.”
“When the weather turns warm in New England every summer, the price of hotel rooms in Caribbean resorts plummets.”
“When a war breaks out in the Middle East, the price of gasoline rises and the new price of a used Cadillac falls.”
In: Economics
Amusement Park ABC has an average of 230 customers per hour arriving at a ticket counter where 8 employees are working. Each employee can serve an average of 30 customers per hour. The squared coefficient of variation for the inter-arrival times is 1.5 and 2 for the service times. a) On average, how many customers will be present at the ticket counter? b) On average, how long will a customer have to wait for an employee?
In: Statistics and Probability
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In: Accounting
In: Economics
Based on the data below, forecast US hotel revenues for 2017, 2018, and 2019. Provide the model developed for your calculations.
YEAR REVENUE ($USD BILLION)
2001 105.00
2002 111.90
2003 118.80
2004 119.30
2005 135.50
2006 146.20
2007 153.80
2008 154.70
2009 133.30
2010 142.00
2011 153.30
2012 155.50
2013 163.00
2014 176.70
2015 189.50
2016 199.30
In: Finance
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at least 3-4 pages
In: Psychology