Accounting Unit 3 Individual Project
Posted: August 6th, 2013
Accounting Unit 3 Individual Project
| Manufacturing | Purchasing | ||||
| Direct labor |
$35 |
Direct labor |
$3.50 |
||
| material |
$30 |
Overhead costs |
$1.50 |
||
| Overhead |
$15 |
Direct material |
$6 |
||
| Total |
$80 |
Total |
$11 |
||
| Question 2 | |||||
| sales price per pair |
$80 |
||||
| target sales |
$10,000 |
||||
| binding price per pair |
$11 |
||||
| total purchase |
$105,000 |
||||
| binding costs when bindings are purchased |
$215,000 |
||||
| gross profit |
$800,000 |
||||
| net profit |
$585,000 |
||||
| Maximum purchase price |
$20 |
||||
| Question 3 | |||||
| manufacturing | Purchasing | ||||
| Sales volume |
$12,500 |
Sales volume |
$12,500 |
||
| equipment |
$10,000 |
Binding cost per pair |
$10.50 |
||
| Total costs for manufacturing |
$1,010,000 |
Other costs per pair |
$11 |
||
| Total costs |
$268,750 |
Question 4
One important factor they should consider is the quality of the bindings. The company should compare manufactured bindings to purchased bindings. They should choose the better quality. Another significant factor is time consumed in manufacturing the bindings. If too much time is consumed in manufacturing the bindings, the compare should purchase them. This will increase productivity of the workers, since the saved time will be used in other areas of production (Hogget et al, 2008). It is also vital for the company to collect views and opinions from customers. They should greatly contribute to the choice of the bindings to be used on the skis.
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