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Cost and Decision-Making Analysis

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Assignment 2: Required Assignment 1?Cost and Decision-Making Analysis;Cheryl Montoya picked up the phone and called her boss, Wes Chan, Vice President of Marketing at Piedmont Fasteners Corporation.;Cheryl: ?Wes, I'm not sure how to go about answering the questions that came up at the meeting with the President yesterday.?;Wes: ?What's the problem??.;Cheryl: ?The president wanted to know the break-even point for each of the company's products, but I am having trouble figuring them out.?;Wes: ?I'm sure you can handle it, Cheryl. And, by the way, I need your analysis on my desk tomorrow morning at 8:00 sharp in time for the follow-up meeting at 9:00.?;Piedmont Fasteners Corporation makes three different clothing fasteners at its manufacturing facility in North Carolina. Data concerning these products appear below;Velcro Metal Nylon;Normal annual sales volume 100,000 units 200,000 units 400,000 units;Unit selling price $1.65 $1.50 $0.85;Variable cost per unit $1.25 $0.70 $0.25;Total fixed expenses are $400,000 per year.;All three products are sold in highly competitive markets, so the company is unable to raise its prices without losing unacceptably large numbers of customers.;The company has a very effective lean production system, so there is no beginning or ending work in process or finished-goods inventories.;Using the module readings, the Argosy University online library resources, and the Internet, research break-even point and costing systems. Analyze the case based on your research and what you have learned so far in the course.;Respond to the following;Calculate the company's overall break-even point in total sales dollars. Explain your methodology (approximately 2 pages).;Of the total fixed costs of $400,000: $20,000 could be avoided if the Velcro product were dropped, $80,000 if the Metal product were dropped, and $60,000 if the Nylon product were dropped. The remaining fixed costs of $240,000 consist of common fixed costs such as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely (approximately 2 pages);Calculate the break-even point in units for each product. Explain your methodology.;Determine the overall profit of the company if the company sells exactly the break-even quantity of each product. Present your results.;Evaluate costing systems for this company. Explain if this company should be using a job-order or process-costing system to accumulate costs (1 page).;Be sure to include your calculations in Microsoft Excel format.;Write a 5?6-page report in Word format. Apply APA standards to citation of sources. Use the following file naming convention: LastnameFirstInitial_M3_A2.doc.;By Wednesday, December 3, 2014, deliver your assignment to the M3: Assignment 2 Dropbox.;Assignment 2 Grading Criteria Maximum Points;Calculated the company's overall break-even point in total sales dollars and explained your methodology. 32;Calculated the break-even point in units for each product in the scenario and explained your methodology. 52;Explained what the overall profit of the company will be if the company sells exactly the break-even quantity of each product and showed your results. 16;Compared and explained if this company should be using a job-order or process-costing system to accumulate costs. 80;Wrote in a clear, concise, and organized manner, demonstrated ethical scholarship in accurate representation and attribution of sources, and displayed accurate spelling, grammar, and punctuation. 20;Total: 200

 

Paper#74852 | Written in 18-Jul-2015

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