Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Life-Cycle Costing Tim Waters, the COO of BioDerm, has asked his cost management team for a product-line profitability analysis for his firm's two products, Xderm and Yderm. The two skin care products require a large amount of research and development and advertising. After receiving the following statement from BioDerm's auditor, Tim concludes that Xderm is the more profitable product and that perhaps cost-cutting measures should be applied to Yderm.
X derm
Y derm
Total
Sales
$3,000,000
$2,000,000
$5,000,000
Cost of goods sold
(1,900,000)
(1,600,000)
(3,500,000)
Gross profit
$1,100,000
$ 400,000
$1,500,000
Research and development
(900,000)
Selling expenses
(100,000)
Profit before taxes
$ 500,000
Required
1. Explain why Tim may be wrong in his assessment of the relative performances of the two products.
2. Suppose that 80 percent of the R&D and selling expenses are traceable to Xderm. Prepare life-cycle income statements for each product. What does this tell you about the importance of accurate life-cycle costing?
3. Consider again your answers in requirements 1 and 2 with the following additional information. R&D and selling expenses are substantially higher for Xderm because it is a new product. Tim has strongly supported development of the new product, including the high selling and R&D expenses. He has assured senior managers that the Xderm investment will pay off in improved profits for the firm. What are the ethical issues, if any, facing Tim as he reports to top management on the profitability of the firm's two products?
What is the reasoning behind treating the purchase of treasury stock as a reduction in stockholders' equity as opposed to treating it as an investment asset?
During June, Argon, Inc., purchases of direct materials totaled $119,000; direct labor for the month was 3,400 hours at $10.00 per hour. Agron also incurred the following overhead costs: Prepare a statement of cost of goods manufactured.
determine the over head cost from the given data.variable and absorption costing unit product costs and income
differences between a state or local governments budgetary practiceswhat are the possible differences that may occur
Calculate the sustainable growth rate based on the following information: earnings after taxes=$35,000 Equity=$100,000 d=22.4% please show your work.
It also is 5-year recovery property. How much depreciation should be taken for 2010 assuming the company uses the accelerated depreciation method under MACRS, but does not choose to make the election to expense or to take bonus depreciation
Sommerville, Corporation repurchased 25,000 shares. Find how many shares are outstanding?
problem irecord the following transactions in a two-column journal. the transactions are for james e. stone who
Compute and interpret liquidity, solvency, and coverage ratios. Selected balance sheet and income statement information from Verizon communications.
Prairie Fire Snowmobile Corp. manufactures and sells snowmobiles in Wisconsin, Minnesota and the Dakotas. A publicly owned corporation, the company’s outstanding stock consisted of 5,000 shares of 10%, $20 par cumulative Preferred Stock and 10,000 sh..
Journalize the transactions, including explanations, post to the ledger T accounts - Prepare a trial balance on April 30, 2010
Using the following Adjusted Trial Balance, (1) prepare an Income Statement, (2) Statement of Retained Earnings (note that Retained Earnings has a beginning balance of $78,600 as shown in the unadjusted Trial Balance), and (3) Balance Sheet.
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd