Can cost-volume-profit analysis be useful for a company that sells more than one product? If so, how? If not, why not?
What will be an ideal response?
Answers will vary.
Cost-volume-profit analysis can be useful for a company that sells more than one product. The analyst would have to make an assumption about what the sales mix will be because changes in sales mix affect the break-even point or level of profits. The assumed sales mix can be used in calculating a weighted average contribution margin, which can then be used to find the break-even point or sales required to earn a target profit.
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What is vendor-managed inventory (VMI)?
What will be an ideal response?
The replacement of a major component increased the productive capacity of equipment from 10 units per hour to 18 units per hour. The expenditure for the replacement component should be debited to:
A. Equipment. B. Gain from Repairs. C. Maintenance Expense. D. Repairs Expense.
Oceanside Marine Company manufactures special metallic materials and decorative fittings for luxury yachts that require highly skilled labor. Oceanside uses standard costs to prepare its flexible budget. For the first quarter of the year, direct materials and direct labor standards for one of their popular products were as follows:
Direct materials: 2 pound per unit; $12 per pound Direct labor: 2 hours per unit; $16 per hour Oceanside produced 3000 units during the quarter. At the end of the quarter, an examination of the direct materials records showed that the company used 6500 pounds of direct materials and actual total materials costs were $99,600. What is the direct materials cost variance? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.) A) $9960 Unfavorable B) $9960 Favorable C) $21,580 Unfavorable D) $21,580 Favorable
Which of the following statements is CORRECT? Assume that the project being considered has normal cash flows, with one cash outflow at t = 0 followed by a series of positive cash flows.
A. A project's MIRR is always less than its regular IRR. B. If a project's IRR is greater than its cost of capital, then its MIRR will be greater than the IRR. C. To find a project's MIRR, we compound cash inflows at the regular IRR and then find the discount rate that causes the PV of the terminal value to equal the initial cost. D. To find a project's MIRR, the textbook procedure compounds cash inflows at the cost of capital and then finds the discount rate that causes the PV of the terminal value to equal the initial cost. E. A project's MIRR is always greater than its regular IRR.