During heaton company’s first two years of operations, it reported absorption costing net operating income as follows: year 1 year 2 sales (@ $63 per unit) $ 1,134,000 $ 1,764,000 cost of goods sold (@ $31 per unit) 558,000 868,000 gross margin 576,000 896,000 selling and administrative expenses* 308,000 338,000 net operating income $ 376,000 726,000 * $3 per unit variable; $254,000 fixed each year. the company’s $31 unit product cost is computed as follows: direct materials $ 7 direct labor 9 variable manufacturing overhead 2 fixed manufacturing overhead ($299,000 ÷ 23,000 units) 13 absorption costing unit product cost $ 31 forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment and buildings. production and cost data for the first two years of operations are: year 1 year 2 units produced 23,000 23,000 units sold 18,000 28,000

required:

1. using variable costing, what is the unit product cost for both years?
2. what is the variable costing net operating income in year 1 and in year 2?
3. reconcile the absorption costing and the variable costing net operating income figures for each year.

Burke enterprises is considering a machine costing $30 billion that will result in initial after-tax cash savings of $3.7 billion at the end of the first year, and these savings will grow at a rate of 2 percent per year for 11 years. after 11 years, the company can sell the parts for $5 billion. burke has a target debt/equity ratio of 1.2, a beta of 1.79. you estimate that the return on the market is 7.5% and t-bills are currently yielding 2.5%. burke has two issuances of bonds outstanding. the first has 200,000 bonds trading at 98% of par, with coupons of 5%, face of $1000, and maturity of 5 years. the second has 500,000 bonds trading at par, with coupons of 7.5%, face of $1000, and maturity of 12 years. kate, the ceo, usually applies an adjustment factor to the discount rate of +2 for such highly innovative projects. should the company take on the project?

When peter metcalf describes black diamond’s manufacturing facility in china as a “greenfield project,” he means that partnered with a chinese company to buy the plant . of all market entry strategies, this one carries the lowest risk. because black diamond manufactures its outdoor sports products outside the united states, what risks must its managers be aware of?

The chromosome manufacturing company produces two products, x and y. the company president, jean mutation, is concerned about the fierce competition in the market for product x. she notes that competitors are selling x for a price well below chromosome's price of $13.50. at the same time, she notes that competitors are pricing product y almost twice as high as chromosome's price of $12.50.ms. mutation has obtained the following data for a recent time period: product x product y number of units 11,000 3,000 direct materials cost per unit $3.23 $3.09 direct labor cost per unit $2.22 $2.10 direct labor hours 10,000 3,500 machine hours 2,100 1,800 inspection hours 80 100 purchase orders 10 30ms. mutation has learned that overhead costs are assigned to products on the basis of direct labor hours. the overhead costs for this time period consisted of the following items: overhead cost item amount inspection costs $16,200 purchasing costs 8,000 machine costs 49,000 total $73,200using direct labor hours to allocate overhead costs determine the gross margin per unit for product x. choose the best answer from the list below.a. $1.93b. $3.12c. $7.38d. $2.43e. $1.73using activity-based costing for overhead allocation, determine the gross margin per unit for product y. choose best answer from list below.a. $10.07b. ($2.27)c. ($5.23)d. ($7.02)e. $7.02