Question
Selling price Units in beginning FG inventory Units produced Units sold Units in ending FG inventory Variable costs per unit: Direct materials Direct labor Variable
Selling price Units in beginning FG inventory Units produced Units sold Units in ending FG inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs: Fixed manufacturing overhead Fixed selling and administrative October 2020 $55 0 300,000 250,000 50,000 $20 $18 $10 $ 2 $375,000 $75,000 Use the same information for Glenn Corporation (GC) as given in Problem 1 to answer the following questions: Required: A. Calculate the quantity break-even for October 2020. B. Calculate the margin of safety in dollar for October 2020. C. The marketing department for Glenn Corporation is planning to undergo a new campaign in November 2020 to help spread awareness of the importance of calculator use to promote math literacy. The campaign will cost $40,000 and is estimated to boost monthly sales by 3%. Glenn Corporation expects no other cost changes from October 2020 to November 2020. Under variable costing, what is the expected operating income for November 2020? D. Based on your answer for part C, explain whether or not Glenn Corporation should undergo the new marketing campaign. E. One of the assumptions of CVP analysis is that price, per unit variable costs, and total fixed costs are all known and constant. Glenn Corporation can receive a bulk discount from its supplier of calculator chips, a key direct material in making calculators, when GC buys as least 50,000 chips at a time. If the purchasing department mainly orders 10,000 chips per order, but sometimes places larger orders exceeding 50,000 chips to receive the bulk discount, will this violate the assumptions of CVP analysis? Explain
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started