Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Smart Stream Inc. uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 10,000 cell phones

image text in transcribed
Smart Stream Inc. uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 10,000 cell phones are as follows: Variable costs per unit: Fixed costs: Direct materials $150 Factory overhead $350,000 Direct labor 25 Selling and administrative expenses 140,000 Factory overhead 40 Selling and administrative expenses 25 Total variable cost per unit Smart Stream desires a profit equal to a 30% return on invested assets of $1,200,000. a. Determine the amount of desired profit from the production and sale of 10,000 cell phones. 360,000 . Determine the product on of 10,000 cell phones. 2,500,00 per unit need help with b c. Determine the product cost markup percentage for cell phones. 30 % d. Determine the selling price of cell phones. Round to the nearest dollar. Total Cost 250 per unit Markup 75 per unit Selling price 325 per unit Sell or Process Further Dakota Coffee Company produces Columbian coffee in batches of 7,500 pounds. The standard quantity of materials required in the process is 7,500 pounds, which cost $6.00 per pound. Columbian coffee can be sold without further processing for $9.80 per pound, Columbian coffee can also be processed further to yield Decaf Columbian, which can be sold for $11.60 per pound. The processing into Decaf Columbian requires additional processing costs of $6,300 per batch. The additional proc sing will also cause a 5% loss of product due to evaporation. a. Prepare a different analysis dated December 11 on whether to sell regular Columbian (Alternative 1) or process further into Decaf Columbian (Alternative 2). If required, use a minus sign to indicate a loss. Differential Analysis Sell Regular (Alt. 1) or Process Further into Decaf (Alt. 2) December 11 Process Sell Further Into Differential Regular Decaf Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues Costs Profit (Loss) b. Should Dakota Coffee Company sell Col c. Determine the price of Decaf Columbian that would cause neither an advantage nor a disadvantage for processing further and selling Decaf Columbian. Round your answer to two decimal places. per pound Investor Advisor Services Services Revenue $5,41 $2,067 Operating income 2,03 962 Depreciation 180 a. The Investor Services - segment ment serves the retail customer, you and me. These are the brokerage, Internet, and used by individual Investors. The Advisor Services - segment includes the same stitutions, such as banks, mu . Com ssions to brokers Variable Cost paid to exchanges for executing trades Variable Cost - 3. Depr h on brokerage offices Fixed Cost 1. - 7. Variable or Fixed 1. Transaction fees incurred by Schwab mutual funds to purchase and sell shares 5. Property taxes on brokerage offices Cost 6. Depr on on brokerage office equipment, such as comp c. Estimate the contribution margin for each segment, assuming depreciation represents the majority of fixed costs. Investor Services Advisor Service (in millions) (in millions) Estimated contribution margin decided to sell its "Advisor Services" accounts to an ow much operating income would decline under could not be sold but would be used by the other sector: million Assume the fixed assets were "sold"

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Inquiry into Physics

Authors: Vern J. Ostdiek, Donald J. Bord

8th edition

1305959426, 9781337515863 , 978-1305959422

Students also viewed these Accounting questions