Chapter_8_9_answers

Chapter_8_9_answers - Chapter 10 Budgetary Planning and...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 10 Budgetary Planning and Control Chapter 8 E5. Accepting the order will result in $110,000 of incremental profit. Incremental revenue $100 x 2,000 $ 200,000 Incremental costs: Material $25 x 2,000 $ 50,000 Labor $15 x 2,000 30,000 Variable overhead $5 x 2,000 10,000 90,000 Incremental profit $ 110,000 E8. Sales $ 53,800 Less: Cost of good sold .9 x $53,800 $ 48,420 Order processing 200 x $5.00 1,000 Rush handling .6 x 200 x $8.50 1,020 Customer service 140 x $10.00 1,400 Relationship management costs 2,000 53,840 Profitability of Johnson Brands account $ (40 ) E9. a. Revenue Sales $ 53,800 Order processing fee 200 x $6 1,200 Rush order fee .6 x 200 x $10 1,200 Customer service fee 140 x $15 2,100 $ 58,300 Total revenue Less costs: Cost of good sold .9 x $53,800 $ 48,420 Order processing 200 x $5.00 1,000 Rush handling .6 x 200 x $8.50 1,020 Customer service 140 x $10.00 1,400 Relationship management costs 2,000 53,840 10-1
Background image of page 1

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

View Full DocumentRight Arrow Icon
Chapter 10 Budgetary Planning and Control Profitability of Johnson Brands account $ 4,460 P2. This approach does not seem unethical. Consumers in certain zip codes are apparently willing to pay higher prices and the company is simply identifying them. Consumers who are in the same zip code but unwilling to pay the 3% higher prices are not forced to make purchases. P4. a. Variable cost per unit $ 2,000 Fixed cost per unit ($10,000,000 ÷ 5,000) 2,000 Total 4,000 Markup of 30% 1,200 Price $ 5,200 b. Price influences the quantity demanded, but the estimated quantity demanded is being used to determine the price! c. Variable cost per unit $ 2,000 Fixed cost per unit ($10,000,000 ÷ 4,000) 2,500 Total 4,500 Markup of 30% 1,350 Price $ 5,850 d. The number of units sold will not equal 4,000 at a price of $5,850 since only 4,000 units were sold at a lower price of $5,200. e. To mark-up full cost, a manufacturing firm must first estimate the
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 10

Chapter_8_9_answers - Chapter 10 Budgetary Planning and...

This preview shows document pages 1 - 3. Sign up to view the full document.

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