Questions and Exercises

Questions and Exercises - Questions and Exercises 1 In the...

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Questions and Exercises 1. In the long run, the normal selling price must be set high enough to cover what factors? The normal selling price must be set high enough to gain a profit and to cover all costs and expenses. 2. Ex. 12-2 a) Revenue from Sales $254,000 Differential cost of annual sales of Royal Cola: Variable cost of goods sold $102,480 Variable operating expenses 124,800 227,280 Annual differential income from sales of Royal Cola $ 26,720 b) Royal Cola should be retained because differential income is greater than differential costs 2. Ex. 12-6 a. Proposal to Manufac ture Carrying Case October 11, 2010 Purchase price of carrying case $ 68.00 Differential cost to manufacture carrying case: Direct materials $ 25.00 Direct labor 32.00 Variable factory overhead 4.80 61.80 Cost savings (loss) from manufac turing carrying case $ 6.20 b. Is it advisabl e to make or buy the manufac Make
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turing case? Explain
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Questions and Exercises - Questions and Exercises 1 In the...

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