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##### Accounting quiz

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Question;1.Tory Company sells a;single product. Troy estimates demand and costs at various activity levels as;follows;Units Sold;Price;Total Variable Costs;Fixed Costs;120,000;\$48;\$3,000,000;\$1,000,000;140,500;\$45;\$3,510,000;\$1,000,000;160,000;\$40;\$4,000,000;\$1,000,000;180,000;\$35;\$4,500,000;\$1,000,000;200,000;\$30;\$5,000,000;\$1,000,000;How much profit will Troy have if a price of \$45 is charged?;2. The Falling Snow;Company is considering production of a lighted world globe that the company;would price at a markup of 0.30 percent above full cost. Management estimates;that the variable cost of the globe will be \$64 per unit and fixed costs per;year will be \$240,000.;Assuming sales of 1,200 units, what is the full cost of a globe;with a 0.30 markup?;3. The Falling Snow;Company is considering production of a lighted world globe that the company;would price at a markup of 0.25 percent above full cost. Management estimates;that the variable cost of the globe will be \$66 per unit and fixed costs per;year will be \$240,000.;Assume that the quantity demanded at the price calculated in;part a is only 600 units. What is the full cost of the globe with a;0.25 markup?;4.;Wizard Corporation has analyzed their customer and order;handling data for the past year and has determined the following costs;Order processing cost per order;\$7;Additional costs if order must be expedited (rushed);\$10.00;Customer technical support calls (per call);\$12;Relationship management costs (per customer per year);\$1200;In addition to these costs, product costs amount to 75%;In the prior year, Wizrd had the following experience with one;of its customers, Chester Company;Sales;\$15,500;Number of orders;160;Percent of orders marked rush;.70;Calls to technical support;80;Required;Calculate the profitability of the Chester Company account.;5.When a firm adds a predetermined percentage to the;cost of its product for pricing purposes, it is called;6.;PowerDrive, Inc.;produces a hard disk drive that sells for \$175 per unit. The cost of;producing 25,000 drives in the prior year was;Direct material;\$625,000;Direct labor;375,000;Variable overhead;125,000;Fixed overhead;1,500,000;Total cost;\$2,625,000;At the start of the;current year, the company received an order for 3,400 drives from a computer;company in China. Management of PowerDrive has mixed feelings about the;order. On the one hand they welcome the order because they currently have;excess capacity. Also, this is the company?s first international order. On;the other hand, the company in China is willing to pay only \$130 per unit.;What will be the;effect on profit of accepting the order?;7. Another name for menu-based pricing is;8. A company has \$45 per;unit in variable costs and \$1,200,000 per year in fixed costs. Demand is;estimated to be 106,000 units annually. What is the price if a markup of 40% on;total cost is used to determine the price?;The ending to number 4 is the phrase (the following cost)

Paper#42879 | Written in 18-Jul-2015

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