ACCT-2020 Study Guide - Midterm Guide: Earnings Before Interest And Taxes, Finished Good, Deutsche Luft Hansa
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PRESIDENT'S PROPOSAL. discontinue the s-pump line immediately. S pumps would not be returned to the product line unless the problems with the pump can be identified and resolved 2. increase quarterly sales promotion $300,000 on the R-pump product line in order to increase sales volume by 15%. 3. cut production on the F-Pump line by 50 percent, and cut the traceable advertising and promotion for this line to $60,000 each quarter.
"Using the operating data presented for ontario pump company and assume that the president's proposed course of action had been implemented at the beginning of the second quarter. Than evaluate the president's proposal by sepcifically responding...
Ontario Pump Company | Shipping Expenses | ||||||||
Income Statement | |||||||||
Second Quarter in thousands | |||||||||
Analysis of unit sales prices for pumps | Qtrly Advertising and Promotions | ||||||||
R-Pump | F-Pump | S-Pump | Total | R-Pump | $600 | $630,000 | $30 | ||
Sales | $4,800 | $2,700 | $2,700 | $10,200 | F-Pump | $270 | $300,000 | $12 | |
Cost of goods sold | $3,144 | $2,310 | $2,850 | $8,304 | S-Pump | $540 | $120,000 | $30 | |
Gross margin | $1,656 | $390 | ($150) | $1,896 | |||||
Selling and Admin. Expenses | $1,110 | $555 | $405 | $2,070 | |||||
Income before taxes | $546 | ($165) | ($555) | ($174) | |||||
Unit manufacturing costs | |||||||||
R-Pump | F-Pump | S-Pump | |||||||
Direct material | $93 | $51 | $150 | ||||||
Direct labor | 120 | 60 | 180 | ||||||
variable manufaturing overhead | $135 | $90 | $180 | ||||||
fixed manufacturing overhead | $45 | $30 | $60 | ||||||
total | $393 | $231 | $570 |
The answer inc/decr fix cost & segment contribution is below. I am trying to figure out how to calculate the increased (decreased) for the fixed cost to get the answer noted below
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Ontario Pump Company Income Statement Second Quarter In thousands | Analysis of unit sales prices for pumps | Qtrly Advertising and Promotions | Shipping Expenses | ||||||||
R-Pump | F-Pump | S-Pump | Total | R-Pump | $600 | $630,000 | $30 | per unit | |||
Sales | $4,800 | $2,700 | $2,700 | $10,200 | F-Pump | $270 | $300,000 | $12 | per unit | ||
Cost of goods sold | $3,144 | $2,310 | $2,850 | $8,304 | S-Pump | $540 | $120,000 | $30 | per unit | ||
Gross margin | $1,656 | $390 | -$150 | $1,896 | $1,050,000 | ||||||
Selling and Admin. Expenses | $1,110 | $555 | $405 | $2,070 | |||||||
Income before taxes | $546 | -$165 | -$555 | -$174 | |||||||
Unit manufacturing costs | |||||||||||
R-Pump | F-Pump | S-Pump | |||||||||
Direct material | $93 | $51 | $150 | ||||||||
Direct labor | 120 | 60 | 180 | ||||||||
variable manufaturing overhead | $135 | $90 | $180 | ||||||||
fixed manufacturing overhead | $45 | $30 | $60 | ||||||||
total | $393 | $231 | $570 |
PRESIDENT'S PROPOSAL. discontinue the s-pump line immediately. S pumps would not be returned to the product line unless the problems with the pump can be identified and resolved 2. increase quarterly sales promotion $300,000 on the R-pump product line in order to increase sales volume by 15%. 3. cut production on the F-Pump line by 50 percent, and cut the traceable advertising and promotion for this line to $60,000 each quarter.
"Using the operating data presented for ontario pump company and assume that the president's proposed course of action had been implemented at the beginning of the second quarter. Than evaluate the president's proposal by sepcifically responding...
I do not understand how the numbers were obtained for unit sales for the pumps i.e. F-pump is 10,000, R-pum is 8,00, S-pump i s 5,000. I see the hint of Unit sales = sales dollars/unit sales price but I am still not able to calculate how to get the 10,000, 8,000, 5,000. it is question 14-62 of the Managerial Accounting 10the ediction....This is the answer (below) the above is all the information given ? are you able to look at the text answer? I am trying to figure out how they got to 10,000, 8,000; and 5,000
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