Calculate the operating leverage for each company. If sales increase, which company benefits more? How do you know?
If sales increase, company B will benefit more. Company B has a higher proportion of fixed costs in
51 Undercosting a product increases the profit from the product and
benefits the firm. Do you agree? Why?
Undercosting a product may appear to have increased the reported profit the product
earned (assuming the firm did not lower its selling price because
Questions 14-1 through 14-12
14-1: What is the difference between a master budget, pro-forma budgets, and a flexible budget?
14-1: A master budget represents forecasted operating profit based on a single output level (planned sales) for an
The observations made by the consultant show that the manufacturer was incurring large costs in
operations, distribution, and administration due to the high level of complexity in its products. Maintaining
relationships with 10 vendors for a single item c
1. Calculate the number of tons completed and transferred out during the month.
2. Calculate the number of equivalent units for both materials and conversion costs for the
month of May, assuming that the company uses the weighted-average method.
Porter's Problems Co.
For Year Ended December 31, Year 2
Porter's Projects Co.
As of December 31, Year 1
Sales Numbers Trasposed for Copying
Base Case Analysis of Park Hill Acres Without Superstore
Sales Growth Rate
Cost of Good Sold
Other Employee Costs
Base Case Sales
Case 10-2: Letsgo Travel Trailers
Data Input Area
Exhibit 1: Actual and Projected Sales in Number of Trailers
Monthly Sales Breakdowns for 1997 (actual) a
Solution (20 min)
Jackson Supply is experiencing the anomaly of achieving its strategic
goals (customer service) while the stock price is falling relative to
competitors. Two questions arise:
1. Is the firm properly measuring customer service? Perhaps mor
decline in expected future demand; the companies are profitable but smaller.
1. Do the recent actions by these companies support their long-term strategy?
2. How do the productivity gains at these companies affect profits in the short -term and
Placement Success (weight = 35%):
Mean Starting Salary and Bonus (14%) -The average starting salary a
graduates of a full-time master's program in business. Salary figures are b
number of graduates that reported data. The mean signing bo
e first payment on December 31, 2000.
e first payment on January 1, 2000, the date the contract was signed.
45 percent income tax bracket, calculate your answer for requirement 1.
mber 31, 2012 @ 6% annual return =
What is Micro Ad
1. Assuming Martens plans to meet the expected demand for 20,000 attic fans, how many should it manufacture and how many should it
purchase from Harris Products? Explain your reasoning with calculations.
2. Idenpendent of Part 1 above, assume that Beth Jo
Solution (15 min)
Current Profit per unit
New target cost (to meet competitve price)
2. The target cost can probably be achieved by efforts in two areas:
a. The analysis of budgeted versus actual cost shows an unfa
Problem 8-45 Regression Analysis
Pilot Shop is a catalog business providing a wide variety of aviation products to pilots throughout
the world. Maynard Shephard, the recently hired assistant controller, has been asked to develop a
cost function to forecas
1. Calculate the budgeted total cash receipts for November and December.
2. Calculate budgeted cash payments for November and December.
Budgeted sales for January of the coming year =
1. Budgeted Cash Receipts:
1. Service and administrative costs are costs that are incurred by
headquarters' staffs or other central units. In order to maintain the
company as a functioning entity, administrative costs are incurred for the
benefit of all units of the company. Servic
1. New Century Software, Inc @ http:/www.newcenturysoftware.com/
The goal of New Century Software, Inc. is to provide products and services to help meet the facilities -based
information needs of the pipeline industry through the use of Geographic Informa