Identify the relevant per-unit costs, Cost Accounting

Assignment Help:

Bakers Bagels LLC produces and sells 20 types of bagels by the dozen. Bagels are priced at $6.00 per dozen (or $0.50 each) and cost $.020 per unit to produce. The company is considering processing the bagels further into two products.: bagels with cream cheese and bagel sandwiches. It would cost an additional $0.50 per unit to produce bagels with cream cheese, and the new selling price would be $2.50 each. It would cost an additional $1.00 per sandwich to produce bagel sandwiches, and the new selling price would be $3.50 each.

1. Identify the relevant per-unit costs and revenues for the alternatives. Are there any sunk costs?
2. Based on the information in requirement 1, should Bakers Bagels expand its product offerings?
3. Suppose that Bakers Bagels did expand its product line to include bagels with cream cheese and bagel sandwiches. Based on customer feedback, the company determined that it could further process those two products into bagels with cream cheese and fruit and bagel sandwiches with cheese. The company's accountant compiled the following information:

Sales revenueif Sales revenue if
Sold without further processed Additional
Product Processing Further Processing Costs
Bagels with cream cheese $2.50 $3.50 Fruit : $1.00
Bagel sandwiches 3.50 4.50 Cheese: $0.50

Perform an incremental analysis to determine if Bakers Bagels should process its products further. Explain your findings.

 


Related Discussions:- Identify the relevant per-unit costs

Direct material, Flying High Company manufactures model airplanes. During t...

Flying High Company manufactures model airplanes. During the month, it manufactured 10,000 airplanes. Each one used an average of 6.5 direct labor hours and an average of 1.5 sheet

Calculate the economic profit and relevent cost, A. Bolero Industries Ltd. ...

A. Bolero Industries Ltd. has been approached by a customer who would like a special job to be done for her, and is willing to pay $60,000 for it. The job would require the followi

Cost estimation methods, using the high low method how do i calculate the c...

using the high low method how do i calculate the costs that are expected when the output expected is out of the range given for example cost prdctn volume 110000

Determine profit by using absorption costing, Determine Profit by Using Abs...

Determine Profit by Using Absorption Costing Assuming the fixed overhead absorption rate was Ksh.3 per litre, then what would be the profit utilizing absorption costing? a)

Participation - behavioural aspects of standards, Participation - Behaviour...

Participation - Behavioural Aspects of Standards It has already been pointed out in the previous paragraph such standard costing systems would be more acceptable whether the e

Determine the optimum cost-time schedule , You have just been assigned to r...

You have just been assigned to replace the current Project Manager for a very important project.  You were provided a WBS for the project planning that had already been conducted,

Operating cycle of a merchandiser, Explain and illustrate with your own exa...

Explain and illustrate with your own example the operating cycle of a merchandiser.   Explain and  illustrate the differences between a multiple-step income statement and a single

Cost accounting, raw an organization chart of any actual or hypothetical ma...

raw an organization chart of any actual or hypothetical manufacturing organization to show the position of management/cost accounting department within an organization and discuss

Write Your Message!

Captcha
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