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Free CMA Exam Braindumps (page: 97)

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View Related Case Study

Panyer Co. is a producer of a tank component. This product, J-5, has the following selling price and costs per unit


Panyer has recently received a special, one-h me order for 2.000 units of J-5. Panyer currently has enough excess capacity for this order. what should be the minimum price charged by Panyer?

  1. $155
  2. $205
  3. $230
  4. $300

Answer(s): B

Explanation:

With the assumption that idle capacity is sufficient to manufacture 2.000 extra units, the goal is to find a minimum price that will not affect the price or quantity of other units sold. This minimum price is equal to the sum of the variable costs. $205



View Related Case Study

Panyer Co is a producer of a tank component. This product, J.5, has the following selling price and costs per unit


Panyer has again received a special, one-time offer for 2.000 units of J-5. Panyer is now operating at full capacity. 10,000 units, at a total cost of $2,300,000. To produce this order would cause a 20% increase in fixed costs what is the minimum price that is acceptable for this one-time, special order?

  1. $205
  2. $260
  3. $230
  4. $300

Answer(s): C

Explanation:

To determine the minimum price per unit, while at full capacity, the differential costs must be found. The total cost of producing 12.000 units is $2,760,000 {(12.000 units x $205 variable cost) + [(10,000 units x $25 fixed cost) x I .2]}. Thus, the total differential cost is $460,000 ($2,760.000 -- $2,300,000), and the unit differential cost is $230 ($460,000 2.000 units).



View Related Case Study

A manufacturer produces a product that sells for $10 per unit. Variable costs per unit are $6 and total fixed costs are $1 2.000. At this selling price, the company earns a profit equal to 10% of total dollar sales By reducing its selling price to $9 per unit, the manufacturer can increase its unit sales volume by 25%. Assume that there are no taxes and that total fixed costs and variable costs per unit remain unchanged It the selling price were reduced to $9 per unit, the profit would be

  1. $3,000
  2. $4,000
  3. $5,000
  4. $6,000

Answer(s): A

Explanation:

To determine the profit under the new pricing policy, the sales volume under the old policy must be calculated



View Related Case Study

A manufacturing concern sells its sole product for $10 per unit, with a unit contribution margin of $6. The fixed manufacturing cost rate per unit is $2 based on a denominator capacity of 1 million units, and fixed marketing costs are $1.5 million. If 900,000 units are produced, the absorption-costing breakeven point in units sold is

  1. 425,000 units,
    B 583.333 units
  2. 900,000 units
    D 1,000,000 units.

Answer(s): A

Explanation:

The absorption-costing breakeven point in units sold equals the sum of(1) the total fixed costs and (2) the product of the fixed manufacturing cost application rate and the difference between the BEP in units sold (X) and units produced, with the sum divided by the UCM Thus, the absorption-costing breakeven point in units sold is 425,000 units






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