Compute the per-unit contribution margin for both models

Assignment Help Managerial Accounting
Reference no: EM13858011

During the past 15 months, a new product has been under development that allows users handheld access to e-mail and video images. Martinez named the product the Wireless Wizard and has been quietly designing two models: Standard and Enhanced. Development costs have amounted to $207,000 and $288.000. respectively. The total market demand for each model is expected to be 57.000 units, and management anticipates being able to obtain the following market shares: Standard. 25 percent: Enhanced. 20 percent. Forecasted data follow.

 

Standard

Enhanced

Projected selling price

$ 430.00

$ 530.00

Production costs per unit:

 

 

Direct material

59.00

93.00

Direct labor

31.00

47.00

Variable overhead

53.00

65.00

Marketing and advertising per product line

212,000 385.000

Sales salaries per product line

94,000
94.000

Sales commissions'

15%
15%


Since the start of development work on the Wireless Wizard, advances in technology have altered the market somewhat, and management now believes that the company can introduce only one of the two models. Consultants confirmed this fact not too long ago. with Martinez paying $36.200 for an in-depth market study. The total fixed overhead is expected to be the same regardless of which product is manufactured.

Required:

1. Compute the per-unit contribution margin for both models.

Reference no: EM13858011

Questions Cloud

Case study-smart cookie : After carefully reading the case study, Smart Cookie, answer the following questions in a 5 page paper with support from a minimum of two external sources.
What common traits are important for good leader to possess : What makes a good and effective leader and what common traits are important for a good leader to possess?
Calculating conversion costs and unit cost : Russia Springs produces premium bottled water. Russia Spring Purchases artesian water, store the water in large tanks, and then runs the water through two processes, filtration and bottling.
How do they compare to those in other parts of the world : How do they compare to those in other parts of the world? Name Two question you would ask as it relates to this topic. Please provide references.
Compute the per-unit contribution margin for both models : During the past 15 months, a new product has been under development that allows users handheld access to e-mail and video images. - Compute the per-unit contribution margin for both models
Do the calculation using the law of corresponding states : Do the calculation using the law of corresponding states
How job stress contribute to deviant behavior in workplace : How can Job Stress contribute to unethical or deviant behavior in the workplace?(120 words)
Amount of miali supplies expense for the year : The cost of supplies purchased by the Miali company was $4500 during the year. Miali Used $3500 worth of those supplies during the year and still had $1000 worth of them left at year end. What was the amount of Miali's supplies expense for the y..
What are the most important elements of new product : A cross functional team at electronic toys has been assembled to create a range of new produces. what are the most important elements of new product development that that they need to focus their limited time on? justify to the group why

Reviews

Write a Review

 

Managerial Accounting Questions & Answers

  What is the overhead cost assigned to product s5

What is the overhead cost assigned to Product S5 under activity-based costing? (Round your intermediate calculations to 2 decimal places.)

  Research and find financial statements for two companies

Research and find financial statements for two companies of your choosing. Drawing on information from this module and the course, analyze the statements and write an essay summarizing which of the two is a better investment.

  Entries for issuing installment note transactions

Entries for issuing installment note transactions - Journalize the entries to record the transactions

  Holly company invests its excess cash in marketable

holly company invests its excess cash in marketable securities. at the beginning of 2010 it had the following portfolio

  Questionthe each of the following independent situations

questionthe each of the following independent situations state whether the company is following a low cost or a

  What journal entry would be made for the days

Explain. What journal entry would be made for the days worked and what entry would be made when the wages are paid on Saturday?

  How do determine the firms market value

How do I determine the firms market value with this information? Debt = $7,000, Common stock ($1 par) = 458 and Retained earnings = $17,000. The firms bonds are currently selling for $996 and the firms stock is currently selling for $55. Tax..

  Cost of capital questions-two aftertax cost of debt

Why do we use the overall cost of capital for investment decisions even when only one source of capital will be used?

  Evaluate direct materials and conversion costs

What are the corresponding units for direct materials and conversion costs, correspondingly, for June?

  Prepare a sales budget by month

Prepare a sales budget, by month and in total, for the third quarter. Also prepare a schedule of expected cash collections, by month and in total, for the third quarter.

  Preparation of flexible budgets

show variable costs per unit, fixed costs, and three different flexible budgets for sales volumes of 7,500, 10,000, and 12,500 units.

  Prepare the journal entries for all three years

The White Company uses the completed-contract method of accounting for construction and has the  data relating to a 3-year project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd