Carry-ALL plans to sell - 71017

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  • Posted on: Mon 04 Aug, 2014
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1. Carry-ALL plans to sell 1,300 carriers next year and has budgeted sales of $46,000 and profits of $22,000. Variable costs are projected to be $20 per unit. Michael Co. offers to pay $24,300 to buy 520 units from Carry-ALL. Total fixed costs are $7,000 per year. This offer does not affect Carry-ALL's other planned operations. The incremental revenues for this situation are

 

 

2. Susan is trying to decide whether or not to attend college during the next 12-week session. She has the following options:



1. Attend college full-time at a cost of $1,200.



2. Attend college part-time at a cost of $600 and work part-time earning $1,600.



3. Work full-time earning $4,900.



What is Susan's incremental profit if she chooses option 3 over option 2?

 

 

3. Aaron's chairs is in the process of preparing a production cost budget for August. Actual costs in July for 120 chairs were:





Materials cost

$4,820



Labor cost

2,560



Rent

1,500



Depreciation

2,500



Other fixed costs

3,200



Materials and labor are the only variable costs. If production and sales are budgeted to increase to 130 chairs in August, how much is the expected total variable cost on the August budget?

 

4. Randy's tireland makes a product that sells for $61 per unit and has $50 per unit in variable costs. Annual fixed costs are $24,000. If Rambles sells 10 units less than breakeven, how much loss would the company recognize on its income statement?

 

5. Stellar Company has the following sales, variable cost, and fixed cost. If sales increase by $10,000 then their profit increases/decreases by how much?

Sales $50,000

Variable Costs $7,300

Fixed Costs $25,000

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