Breakeven point in units for the peoria plant
Course:- Managerial Accounting
Reference No.:- EM13487626

Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Managerial Accounting

Deciding where to produce (CMA, adapted) The Domestic Engines Co. produces the same power generators in two Illinois plants, a new plant in Peoria and an older plant in Moline. The following data are available for the two plants:

133_Breakeven point.PNG

All fixed costs per unit are calculated based on a normal capacity usage consisting of 240 working days. When the number of working days exceeds 240, overtime charges raise the variable manufacturing costs of addition units by $3.00 per unit in Peoria and $8.00 per unit in Moline. Domestic Engines Cc. is expected to produce and sell 192,000 power generators during the coming wanting to take advantage of the higher operating income per unit at Moline, the company's product manager has decided to manufacture 96,000 units at each plant, resulting in a plan in which Moline operates at capacity (320 units per day X 300 days) and Peoria operates at its normal volume (400 units per X 240 days). If you want to use Excel to solve this problem, go to the Excel Lab at www.prenhall.com/horngren/costl3e and download the template for

1. Calculate the breakeven point in units for the Peoria plant and for the Moline plant

2. Calculate the operating income that would result from the production manager's plan to produce 96,000 units at each plant.

3. Determine how the production of 192,000 units should be allocated between the Peoria and Moline plants to maximize operating income for Domestic Engines. Show yourcalculations.

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Managerial Accounting) Materials
BUACC2603 CORPORATE ACCOUNTING. With reference to the above statement describe what you understand by the accounting concepts mentioned and provide examples from your select
You are asked to prepare a Balanced Scorecard using either Option 1, 2 or 3.In doing this Balanced Scorecard you are required to provide for each of the Four Perspectives of
State your chosen business and what products (ideally 2 complementary products) you intend to sell. Provide in your own words, background as to the general price of goods a
Consider your professional experiences as well as your review of the Required and/or Optional Resources and determine what type of variances might be the most alarming to se
View of the managing director of AB Company, what price should Division B charge for XK120, and what volume should be sold in order to maximise return on investment for the
K's Cornerspot, a popular university eatery in a competitive market, has seating & staff capacity to serve about 600 lunch customers every day. For the past 2 months, demand
Direct labor variance is the difference between the standard cost and the actual cost of production. Considering this, answer the questions that follow:•   What effect, if any
Calculate Current Ratio and Quick Asset Ratio for the years 2015 and 2014. Show it in a table as in the previous sections and comment on the Company's liquidity position