Question
Triton Company's copy department, which does almost all of the photocopying for the sales department and the administrative department, budgets the following costs for the
Triton Company's copy department, which does almost all of the photocopying for the sales department and the administrative department, budgets the following costs for the year, based on the expected activity ofcopies:
Salaries (fixed) $88,000
Employee benefits (fixed) 10,000
Depreciation of copy machines (fixed) 10,000
Utilities (fixed) 5,000
Paper (variable, 1 cent per copy) 50,000
Toner (variable, 1 cent per copy) 50,000
The costs are assigned to two cost pools, one for fixed and one for variable costs. The costs are then assigned to the sales department and the administrative department. Fixed costs are assigned on a lump-sum basis, 40 percent to sales and 60 percent to administration. The variable costs are assigned at a rate of 2 cents per copy. Assumingthe following copies were made during the year, 2,797,750 for sales and 2,983,750 for administration, calculate the copy department costs allocated to sales.
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Mama Italian Sauce
Production Cost Budget
April 2008
Production - Jars of sauce
20,000
Ingredient cost (variable)
$16,000
Labor cost (variable)
9,000
Rent (fixed)
4,000
Depreciation (fixed)
6,000
Other (fixed)
1,000
Total
$36,000
The company is currently producing and sellingjars of sauceThe jars of sauce sell for $4 per jar.The company is considering lowering the price to $3.70 per jar.Suppose this action will increase sales.What is the incremental costs associated with producing an extra 72,500 jars of sauce?
______________________________________________
Consider the production cost information for Mama Italiano Sauce given below:
Mama Italiano Sauce
Production Cost Budget
April 2008
Production - Jars of sauce
20,000
Ingredient cost (variable)
$16,000
Labor cost (variable)
9,000
Rent (fixed)
4,000
Depreciation (fixed)
6,000
Other (fixed)
1,000
Total
$36,000
The company is currently producing and selling 250,000 jars of sauce annually.The jars of sauce sell for $4 per jar.The company is considering lowering the price to $3.65 per jar.Suppose this action will increase sales to 310,500 jars of sauce.What is the incremental revenue associated with the price reduction of sauce?
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