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Assignment 2: LASA #1 Cost and Decision Making Ana...




Assignment 2: LASA #1 Cost and Decision Making Analysis Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. Data concerning these products appear below: 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 unacceptable numbers of customers. The company has an extremely effective lean production system, so there are no beginning or ending work in process or finished goods inventories. Directions: You are to answer the following: Calculate what the company's over-all 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. Explain if the company sells exactly the break-even quantity of each product, what will be the overall profit of the company and show your results. Compare and explain if this company should be using a job order or process-costing system to accumulate costs (one page).,Tutor Michael, I am sorry, it was in the question but looks like it did not copy and transfer over. Velcro Metal Nylon Normal annual sales volume 100,000 200,000 400,000 Unit selling price $1.65 $1.50 $0.85 Variable cost per unit $1.25 $0.70 $0.25 Thanks for all your help! Misty Dawn


Paper#9771 | Written in 18-Jul-2015

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