Javier's Pizza Point has a margin per unit of $2.00 for a typical pizza, total fixed expenses of $10,000, and average variable costs of $3.00 per pizza. How many pizzas must Javier sell to break even?
A) 2,000
B) 3,334
C) 5,000
D) 20,000
E) 30,000
C
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A continuous budget:
a. is prepared for only the relevant range. b. is a plan updated monthly or quarterly. c. is a plan where one month or quarter is dropped and another is added. d. Both b and c answers are correct. e. All of the answers are correct.
During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials, $5 per unit, Direct labor, $3 per unit, Variable overhead, $4 per unit, and Fixed overhead, $250,000. The company produced 25,000 units, and sold 20,000 units, leaving 5,000 units in inventory at year-end. What is the value of ending inventory under absorption costing?
A. $60,000 B. $110,000 C. $50,000 D. $310,000 E. $250,000
Use this information for questions that refer to the United Tools case.Terry Harter is marketing manager for United Tools, and Mike O'Reilly is the firm's logistics manager. They work together to make decisions about how to get United's hand and power tools to its customers-a mix of manufacturing plants and final consumers (who buy United tools at a hardware store). United Tools does not own its own transport facilities, and it works with wholesalers to reach its business customers.Together, Harter and O'Reilly try to coordinate transporting, storing, and product-handling activities to minimize cost while still achieving the customer service level their customers and intermediaries want. This usually requires that United keep an inventory of most of its products on hand; but demand for
its products is fairly consistent over time, so inventory is easy to manage.Harter has identified four options for physical distribution systems she could use to reach two of her key wholesalers, Ralston Supply and Ricotta Tool Co. The total cost for each option-and the distribution service levels that can be achieved-are as follows:
Ralston Supply expects a very high level (90 percent) of distribution customer service. Ricotta Tool Co. is willing to settle for a 70 percent customer service -leveleven if that means some products will occasionally be out of -stockif it gets products at a lower price.For its large retail hardware customers (like Home Depot), United regularly ships smaller orders directly to individual stores or in some cases to the retail chain's warehouses. Cross-country shipments usually go by rail, while regional shipments usually go by truck. It appears that United Tools
A. needs to buy its own fleet of trucks.
B. uses the distribution system with the lowest transportation cost.
C. is implementing the physical distribution concept.
D. works to provide just-in-time delivery to both of its wholesalers.
E. All these answers are correct.
If a project uses an asset the corporation already owns, the cost of that asset for capital budgeting
purposes is zero to reflect the advantage the project has over projects that require the purchase of new assets. Indicate whether the statement is true or false