29 Jun Question 21. TwoShaft Inc. manufactures a wide variety of
Question
21. TwoShaft Inc. manufactures a wide variety of parts for recreational boating, including boat engines. The component is purchased by OEM (Original Equipment Manufacturers) such as Mercury and Honda, for use in the larger and more powerful outboards. The units sell for $660, and sales volume averages 32,000 units per year. Recently, TwoShaft’s major competitor lowered the price of the equivalent part to $590. The market was very competitive, and TwoShaft realized it had to meet the new price or lose significant market share. The controller assembled the following data for the most recent year:
The target cost for maintaining current market share and profitability is (round to nearest cent):
A. $466.61.
B. $417.12.
C. $396.61.
D. $390.61.
E. $460.61.
22. Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models – one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13).
The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools:
LCI currently sells the B-13 model for $1,775 and the F-32 model for $1,220. Manufacturing costs and activity usage for the two products are as follows:
The product cost for model B-13 is:
A. $1,457.82.
B. $1,293.32.
C. $1,159.34.
D. $905.31.
E. $980.91.
23.
Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models – one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13).
The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools:
LCI currently sells the B-13 model for $1,775 and the F-32 model for $1,220. Manufacturing costs and activity usage for the two products are as follows:
The product cost for model F-32 is:
A. $1,457.82.
B. $1,293.32.
C. $1,159.34.
D. $905.31.
E. $980.91.
24. Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models – one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13).
The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools:
LCI currently sells the B-13 model for $1,775 and the F-32 model for $1,220. Manufacturing costs and activity usage for the two products are as follows:
The profit margin based on manufacturing cost for model B-13 is:
A. $481.68.
B. $314.69.
C. $239.09.
D. $317.18.
E. $338.16.
25. Lens Care Inc. (LCI) manufactures specialized equipment for polishing optical lenses. There are two models – one mainly used for fine eyewear (F-32) and another for lenses used in binoculars, cameras, and similar equipment (B-13).
The manufacturing cost of each unit is calculated using activity-based costing, using the following manufacturing cost pools:
LCI currently sells the B-13 model for $1,775 and the F-32 model for $1,220. Manufacturing costs and activity usage for the two products are as follows:
The profit margin based on manufacturing cost for model F-32 is:
A. $481.68.
B. $314.69.
C. $239.09.
D. $317.18.
E. $338.16.
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