! Required information [The following information applies to the questions displayed below.] Celestial Products, Inc., has...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
! Required information [The following information applies to the questions displayed below.] Celestial Products, Inc., has decided to introduce a new product, which can be manufactured by either a computer- assisted manufacturing system or a labor-intensive production system. The manufacturing method will not affect the quality of the product. The estimated manufacturing costs by the two methods are as follows: Direct material Computer-Assisted Manufacturing System $ Labor-Intensive Direct labor (DLH denotes direct-labor hours) Variable overhead 0.5DLH @ $25.50 0.5DLH @ $16.50 9.00 12.75 8.25 Production System $ 0.8DLH @ $21.00 0.8DLH @ $16.50 9.90 16.80 13.20 Fixed overhead* $4,410,000 $2,730,000 *These costs are directly traceable to the new product line. They would not be incurred if the new product were not produced. The company's marketing research department has recommended an introductory unit sales price of $75.00. Selling expenses are estimated to be $900,000 annually plus $4.50 for each unit sold. (Ignore income taxes.) Required: 1. Calculate the estimated break-even point in annual unit sales of the new product if the company uses the (a) computer-assisted manufacturing system; (b) labor-intensive production system. (Do not round intermediate calculations. Round your final answers to the nearest whole number.) Computer-assisted manufacturing system Labor-intensive production system Break-Even Point units units ! Required information [The following information applies to the questions displayed below.] Celestial Products, Inc., has decided to introduce a new product, which can be manufactured by either a computer- assisted manufacturing system or a labor-intensive production system. The manufacturing method will not affect the quality of the product. The estimated manufacturing costs by the two methods are as follows: Direct material Computer-Assisted Manufacturing System $ Labor-Intensive Direct labor (DLH denotes direct-labor hours) Variable overhead 0.5DLH @ $25.50 0.5DLH @ $16.50 9.00 12.75 8.25 Production System $ 0.8DLH @ $21.00 0.8DLH @ $16.50 9.90 16.80 13.20 Fixed overhead* $4,410,000 $2,730,000 *These costs are directly traceable to the new product line. They would not be incurred if the new product were not produced. The company's marketing research department has recommended an introductory unit sales price of $75.00. Selling expenses are estimated to be $900,000 annually plus $4.50 for each unit sold. (Ignore income taxes.) Required: 1. Calculate the estimated break-even point in annual unit sales of the new product if the company uses the (a) computer-assisted manufacturing system; (b) labor-intensive production system. (Do not round intermediate calculations. Round your final answers to the nearest whole number.) Computer-assisted manufacturing system Labor-intensive production system Break-Even Point units units
Expert Answer:
Related Book For
Posted Date:
Students also viewed these accounting questions
-
3. Each item produced by a certain manufacturer is, independently, of acceptable quality with probability 0.90. Approximate the probability that at most 15 of the next 150 items produced are...
-
Celestial Products, Inc. has decided to introduce a new product, which can be manufactured by either a computer-assisted manufacturing system or a labor-intensive production system. The manufacturing...
-
Zodiac Company has decided to introduce a new product, which can be manufactured by either a computer-assisted manufacturing system or a labor-intensive production system. The manufacturing method...
-
Viola, Iona and Paula form a joint for the sale of merchandise. Iona and Paula are to contribute the merchandise, Viola is to act as the manager and is to be allowed a bonus of 25% of the profit...
-
Match the polar equations to the graphs labeled I-VIII in Figure 11, giving reasons for your choices. a. r = cos(θ/2) b. r = sec(3θ) c. r = 2 - 3 sin(5θ) d. r =...
-
P12.7 (LO 2, 3), AP Presented here are the financial statements of Warner Company. Warner Company Comparative Balance Sheets December 31 Additional data: 1. Depreciation expense was $17,500. Assets...
-
Lessee Company enters into a 6-year finance lease of non-specialized equipment with Lessor Company on January 1,2020 . Lessee has agreed to pay \(\$ 28,000\) annually beginning immediately on January...
-
The Sanding Department of Richards Furniture Company has the following production and manufacturing cost data for March 2012, the first month of operation. Production: 9,000 units finished and...
-
Question 10 0 out of 1 points T takes out a home equity loan for $25,000 at 10 percent. He immediately purchases $25,000 of tax?? exempt bonds earning 8% a yeac The IRS will probably Selected 0...
-
(Note: Although this question is based on the Skates 'n' Surf business the accounts, amounts and transactions involved may differ between questions. Please read each question separately.) Skate n...
-
Guzzler Enterprise Limited recently issued a deep discount loan note which has an issue cost of $10 million. The nominal value of the loan note is $100 million on January 1, 2017, which also has a...
-
Define what is meant by a normal population distribution. Why is a normal population distribution important in statistical sampling in auditing ?
-
Explain what is meant by the reliability of difference estimation. Under what circumstances is difference estimation likely to be reliable, and when is it likely to be unreliable ?
-
Define what is meant by a population distribution. What is the relevance of population distributions for variables sampling ?
-
Explain what is meant by efficiency as the term is used in difference estimation. Under what circumstances is difference estimation apt to be more efficient than unstratified mean-per-unit ?
-
How does hire purchase differ from leasing?
-
Select a publicly traded company of your choice and analyze its financial statements. Discuss the following: Identify the stage your chosen company is in of the corporate life cycle. How does this...
-
The Alert Company is a closely held investment-services group that has been very successful over the past five years, consistently providing most members of the top management group with 50% bonuses....
-
Rutherford Wheel and Axle, Inc. has an automate production process, and production activity is quantified in terms of process hours. A standard-costing system is used. The annual static budget for...
-
Hudson Community College enrolls students in two departments, Liberal Arts and Sciences. The college also has two service departments, the Library and the Computing Services Department. The usage of...
-
Refer to the data given in the preceding exercise. Required: Use the relative-sales-value method to allocate Breakfast time Cereal Companys joint production cost between Yummies andCrummies. Joint...
-
1.2 Pokmon GO. Crystal Gomez, who lives in Mexico City (as noted in Global Finance in Practice 1.2 in the chapter), bought 100 Pokcoins for 17 Mexican pesos (Ps or MXN). Nintendo of Japan, one of the...
-
1.3 Isaac Dez of Brazil. Isaac Dez Peris lives in Rio de Janeiro, Brazil. While attending school in Spain, he meets Juan Carlos Cordero from Guatemala. Over the summer holiday, Isaac decides to visit...
-
1.4 Munich to Moscow. For your post-graduation cel- ebratory trip, you decide to travel from Munich, Germany, to Moscow, Russia. You leave Munich with 15,000 euros (EUR) in your wallet. Wanting to...
Study smarter with the SolutionInn App