cost accounting 344

SoccerBoss
Category:
Accounting
Price: $10 USD

Question description

Household Manufacturing Inc. sells its product for $45 each.

Sales volume averages 2,000 units per year.

Recently, its main competitor reduced the price of its product to $30.

Maximum expects sales to drop dramatically unless it matches the competitor's price.

In addition, the current profit per unit must be maintained.

Information about the product (for production of 2,000) is as follows:

Standard Quantity

Actual Quantity

Actual Cost

Materials (pounds)

 3,200 

 3,500 

 $35,000 

Labor (hours)

 900 

 1,000 

 $30,000 

Setups (hours)

0

125

 $3,000 

Material handling (moves)

0

200

 $4,000 

Warranties (number repaired)

0

450

 $11,000


Tutor Answer

(Top Tutor) Daniel C.
(997)
School: UCLA
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