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Sloan Transmissions, Inc., has the following estimates for its new gear assembly project: price = $2,300 per unit; variable costs = $460 per unit; fixed
Sloan Transmissions, Inc., has the following estimates for its new gear assembly project: price = $2,300 per unit; variable costs = $460 per unit; fixed costs = $4.2 million, quantity = 76,000 units. Suppose the company believes all of its estimates are accurate only to within +15 percent. What values should the company use for the four variables given here when it performs its best-case scenario analysis? What about the worst-case scenario? Unit Variable cost Scenario Base Best Fixed Costs 4,200,000 Units Sales 76,000 $ 87,400 64,600 Unit Price 2,300 $ 2,645 1,955 460 $ 391 Worst 529 K-Too Everwear Corporation can manufacture mountain climbing shoes for $42.98 per pair in variable raw material costs and $25.40 per pair in variable labor expense. The shoes sell for $134 per pair. Last year, production was 150,000 pairs. Fixed costs were $1,105,000. a. What were total production costs? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the marginal cost per pair? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the average cost per pair? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) d. If the company is considering a one-time order for an extra 6,000 pairs, what is the minimum acceptable total revenue from the order? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) $ $ a. Total production cost b. Marginal cost per pair c. Average cost per pair d. Minimum total revenue 11,362,000 68.38 75.75 $ Night Shades Inc. (NSI) manufactures biotech sunglasses. The variable materials cost is $12.50 per unit, and the variable labor cost is $5.60 per unit. a. What is the variable cost per unit? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. Suppose the company incurs fixed costs of $520,000 during a year in which total production is 210,000 units. What are the total costs for the year? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c. If the selling price is $41.00 per unit, what is the cash break-even point? If depreciation is $320,000 per year, what is the accounting break-even point? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) 18.10 a. Variable cost per unit b. Total cost Cash break-even point Accounting break-even point C. 28,669.00 units 36,681.00 units
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