1. The Pleasantville Company makes 20,000 units per year of a part used in production. The unit
product cost is as follows:
Variable Manufacturing Overhead
Fixed Manufacturing Overhead
Unit product cost
1. The Huffman Tire Company has 3,000 tires in its inventory which are considered obsolete. Each unit
originally cost the company $35. Management is considering options to reduce these inventory
levels. Units can be sold directly to car dealerships for $3
Belimo Project: New Castle County Courthouse, Wilmington, DE
Effective June 2009
Pipe Package provides reliability,
fast delivery and ease of installation.
L30046 - 06/09 - Subject to change. Belimo Airc
1. Myers Quarry produces coarse gravel and sand in an 8:2 ratio. Joint costs for a month (volume 5
9,000 tons of rocks input) amount to $225,000. Values at the split-off point are $30 per ton for gravel
and $40 per ton for sand.
a. Allocate join
Decision Making in the Short Term
1. (Appendix A)
a. Let us begin by calculating relative sales values.
9,000 tons 0.8 $30
9,000 tons 0.2 $40
Thus, 75% of the joint cost (=$216,000/$288,000) would be allocated
1. Most short-term decisions deal with temporary gaps between:
A. A flexible supply of capacity and a fixed demand.
B. The inability to change selling price and the ability to estimate controllable costs.
C. The amount of fixed costs that
1. Because potential longer-term effects could vary across short-term decision options, they might be
2. Quantifying the longer-term implications of short-term actions is relatively simple.
Quantifying the longer-term implicat
1. Gecko Company is evaluating the use of a supplier versus making the wheels for its skateboards
internally. The currently manufactured wheels have a variable unit cost of $2. Fixed costs are
$16,000 per month, however, 25% can be eliminated if wheels ar
Marketing Plan For Nokia
Nokia is occupied with the assembling of portable devices
and in merging Internet and interchanges.
It is the world's biggest maker of cell phones.
Nokia produces mobile devices for each
1. In general, analysis that considers only controllable or relevant costs is less efficient when decision
options differ only with respect to a few benefit and cost items.
In general, analysis that considers only controllable or relevant costs
Functions and Graphs
Functions are used to describe the relationship between two
Ex: Suppose y = f(x), where f(x) = 2x + 4
if x is 1, y must be 2(1) + 4 = 6
if x is 2, y must be 2(2) + 4 =