B/6021 B6021 B 6021 WEEK 3 ASSIGNMENT
- argosy-university / B 6021
- 01 Jun 2018
- Price: $15
- Other / Other
B 6021 WEEK 3 ASSIGNMENT
Assignment
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):
o
Calculate
the break-even point in units for each product. Explain your methodology.
o
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.
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