The process plainfield uses to manufactures the cookies islabore intensive it re
ID: 2662217 • Letter: T
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The process plainfield uses to manufactures the cookies islabore intensive it relies heavily on direct labor. Last yearPlainfield sold 300,000 dozen cookies at 2.50 per dozen. Varaiblecost as thei level of production totaled 1.50 per dozen and fixedcost for the year total 150.000 a.. prepare a contribution margin income statement fiorlast year b. calculater the compnay contirbution margin ratio andbreak even point in slaes unit for last year c. plainfield direct labor rate is going to go up to0.40 a dozen next year. Assuming that the selling price stays at2.50 a dozen calculate next years contribution margin and breakevenpoint in slaes units d. Plainfield management is thinking about automation theproduction process a change that would reduce varialbe costs by0/60 a dozen but would raise fixed cost by 150.000 a yr. If thecompnay undertake the automation project, how would itscontribution margin and breakeven point in slaes units beaffected? e. Assuming thea plainfield does go ahead with the automationproject how many dozen cookies would the compnay have to sell 2.50a dozen to earn the same income it earned last year? f. What are some fo the nonfinaincail aspects of theautomation decision that Plainsfield management should consideredwhen deciding wheter to embark in the automation project ornot? The process plainfield uses to manufactures the cookies islabore intensive it relies heavily on direct labor. Last yearPlainfield sold 300,000 dozen cookies at 2.50 per dozen. Varaiblecost as thei level of production totaled 1.50 per dozen and fixedcost for the year total 150.000 a.. prepare a contribution margin income statement fiorlast year b. calculater the compnay contirbution margin ratio andbreak even point in slaes unit for last year c. plainfield direct labor rate is going to go up to0.40 a dozen next year. Assuming that the selling price stays at2.50 a dozen calculate next years contribution margin and breakevenpoint in slaes units d. Plainfield management is thinking about automation theproduction process a change that would reduce varialbe costs by0/60 a dozen but would raise fixed cost by 150.000 a yr. If thecompnay undertake the automation project, how would itscontribution margin and breakeven point in slaes units beaffected? e. Assuming thea plainfield does go ahead with the automationproject how many dozen cookies would the compnay have to sell 2.50a dozen to earn the same income it earned last year? f. What are some fo the nonfinaincail aspects of theautomation decision that Plainsfield management should consideredwhen deciding wheter to embark in the automation project ornot?Explanation / Answer
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