Q. 2. Prepare the budgeted 2017 income statement for Oven-Safe Classic that the production, quality,...
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Q. 2. Prepare the budgeted 2017 income statement for Oven-Safe Classic that the production, quality, and product managers considered when they discussed the first option available to them. a. Under that option, the shipment would be delayed and about one third of the years sales of 6,000,000 units would be lost. b. The product would be sold at the 11% price reduction but produced under the old cost structure for six months (variable production costs of $5.55 per unit). After six months, the variable cost savings of 36% would be achieved. c. Assume that recycling the current production would add $500,000 to the fixed production costs originally budgeted for 2017. In addition, the product line will incur an additional $2,000,000 in design engineering to solve the problem within a 6-month period (this will involve the use of overtime and consultants). d. Other cost items would stay as originally budgeted for 2017. What would the product lines profit be under this alternative? What would the return on sales for the product line be? PLEASE ANSWER D PART ONLY OR ALL OF THEM ASAP
Q. 2. Prepare the budgeted 2017 income statement for Oven-Safe Classic that the production, quality, and product managers considered when they discussed the first option available to them.
a. Under that option, the shipment would be delayed and about one third of the years sales of 6,000,000 units would be lost.
b. The product would be sold at the 11% price reduction but produced under the old cost structure for six months (variable production costs of $5.55 per unit). After six months, the variable cost savings of 36% would be achieved.
c. Assume that recycling the current production would add $500,000 to the fixed production costs originally budgeted for 2017. In addition, the product line will incur an additional $2,000,000 in design engineering to solve the problem within
a 6-month period (this will involve the use of overtime and consultants).
d. Other cost items would stay as originally budgeted for 2017. What would the product lines profit be under this alternative? What would the return on sales for the product line be?
PLEASE ANSWER D PART ONLY OR ALL OF THEM
ASAP
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