All categories

26 days ago

The Dorilane Company produces a set of wood patio furniture consisting of a table and four chairs. The company has enough custom

er demand to justify producing its full capacity of 3,800 sets per year. Annual cost data at full capacity follow:Direct labor $89,000Advertising $101,000Factory supervision $66,000Property taxes, factory building $20,000Sales commissions $63,000Insurance, factory $7,000Depreciation, administrative office equipment $3,000Lease cost, factory equipment $15,000Indirect materials, factory $20,000Depreciation, factory building $108,000Administrative office supplies (billing) $5,000Administrative office salaries $111,000Direct materials used (wood, bolts, etc.)$425,000Utilities, factory $40,0001. Enter the dollar amount of each cost item under the appropriate headings. Note that each cost item is classified in two ways: first, as variable or fixed with respect to the number of units produced and sold; and second, as a selling and administrative cost or a product cost. (If the item is a product cost, it should also be classified as either direct or indirect.)2. Compute the average product cost of one patio set.3. Assume that production drops to only 1,000 sets annually. Would you expect the average product cost per set to increase, decrease, or remain unchanged?

Business

You might be interested in

According to physicist and philosopher Albert Einstein, "Nothing will benefit human health and increase chances of survival of l

marusya05 [3725]

Answer:

I concur with the statement made. Recent studies indicate that beef production is significantly taxing on freshwater resources (approximately 200 liters of water are required per kg of beef).

Explanation: Observing the current global climate change and the numerous species, aside from humans, facing extinction due to these environmental shifts strengthens my agreement with this perspective. Nevertheless, I find it challenging to alter my eating habits and find it hard to reduce meat consumption. I believe a key element for behavioral change is to establish varying stages, and many individuals like myself could benefit from a gradual approach to align consumption habits with a more conscious lifestyle.

6 0

3 months ago

Tyler company has been approached by a new customer with an offer to purchase 6,000 units of its product kr200 at a price of $11

Katen [3525]

Thus, Tyler's company has acquired a new customer who is willing to purchase 20% of the annual production at a 40% discount.

8 0

3 months ago

_____ allow you to save money by having others prepay for your expense.

soldi70 [3635]

Prepaid cards and gift cards are tools that help you save money as they allow others to pay for your expenses in advance. Essentially, both types serve a similar function, being preloaded with funds by another party (or yourself) and handed to you, ensuring expenses are taken care of without utilizing your own resources.

7 0

3 months ago

Your company is upgrading the breakroom and kitchen. It is going to include an expresso machine, a fridge with compartments for

Nady [3600]

Response:

1. Year One: 20,367 20,017

2. Year Two: 21,333 21,917

3. For NPW analysis, Selected Target is the optimal choice, being the more favorable and cost-effective investment, while EUAM analysis suggests that Walmart's kit is superior.

4. Target emerges as the optimal selection since the cost difference is merely about $600, benefiting from a lifespan of 6 Years, whereas in the case of Walmart, complete furniture replacement is necessary in 3 Years.

Explanation:

1. NPW Analysis

Walmart Kit Target

Initial Cost 40000 65000

AMC 10000 12000

Salvage Value 12000 25000

Lifespan (Years) 3 6

Total Costs

Initial Cost 40000 65000

Less Salvage 12000 25000

Net Amount 28000 40000

5% Interest 6000 19500

AMC Present Value 2.71 5.05

AMC Amount 27100 60600

Total Costs 61100 120100

In Year One 20,367 20,017

2. EUAW Analysis

Walmart Kit

Target

Initial Cost 40000 65000

AMC 10000 12000

Salvage Value 12000 25000

Lifespan (Years) 3 6

Total Costs

Initial Cost 40000 65000

Less Salvage 12000 25000

Net Amount 28000 40000

5% Interest 6000 19500

AMC 30000 72000

Total 64000 131500

In Year Two 21,333 21,917

From NPW analysis, Selected Target proves to be the better choice due to its superior investment value, while EUAM indicates Walmart's kit as the preferable option.

Target stands out as the preferred selection owing to the minimal cost differential of about $600, ensuring a longevity of 6 Years, whilst Walmart's furniture would require complete replacement within 3 Years.

Thus, we would advise management to consider the Target product as the best choice available.

7 0

3 months ago