Assignment 2: Required Assignment 1—Cost and Decision-Making Analysis

Accounting
Tutor: None Selected Time limit: 1 Day

f 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):

May 28th, 2015

SOLUTIONS:

Velcro - 100,000 * $1.65 = $ 165,000

Metal - 200,000 * $1.50 = $ 300,000

Nylon - 400,000 * $0.85 = $ 340,000

Total Sales $ 805,000

Formula: Variable Cost per unit * unit sold

Velcro -$1.25 * 100,000 = $ 125,000

Metal - $0.70 * 200,000 = $ 140,000


May 28th, 2015

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May 28th, 2015
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May 28th, 2015
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