Vernom - Smeal College of Business Accounting for Decision...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Smeal College of Business Accounting for Decision Making: ACCTG 211 Pennsylvania State University Professor Huddart Vernom Corporation The Vernom Corporation, which produces and sells to wholesalers a highly successful line of summer lotions and insect repellents, has decided to diversify to stabilize sales throughout the year. A natural area for the company to consider is the production of winter lotions and creams to prevent dry and chapped skin. The product selected (called Chap-Off) is a lip balm that will be sold in a lipstick-type tube. The product will be sold to wholesalers in boxes of 24 tubes for $8 per box. Because of available capacity, no additional fixed charges will be incurred to produce the product. A $100,000 charge will be absorbed by the product, however, to allocate a fair share of the company’s present fixed costs to the new product. Using the estimated sales and production of 100,000 boxes of Chap- Off as the expected volume, the accounting department has developed the...
View Full Document

This note was uploaded on 05/29/2008 for the course ACCTG 211 taught by Professor Johnston during the Spring '99 term at Penn State.

Page1 / 2

Vernom - Smeal College of Business Accounting for Decision...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online