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# Last year Zimmer Co. sold 10,000 units that cost \$40,000 to produce..docx

Last year Zimmer Co. sold 10,000 units that cost \$40,000 to produce. This cost included \$5,000 in fixed computer resource costs, \$10,000 in fixed labor costs, and communication resource costs at \$2.50 per unit. Resource (variable) costs are expected to be the same next year. Zimmer expects to sell 15,000 units. The sales manager predicts that next year’s cost will be \$60,000.

Required:
Comment on the sales manager’s cost prediction using CVP analysis.(Cost-Volume-Profit)
.

Last year Zimmer Co. sold 10,000 units that cost \$40,000 to produce. This cost included \$5,000 in fixed computer resource costs, \$10,000 in fixed labor costs, and communication resource costs at \$2.50 per unit. Resource (variable) costs are expected to be the same next year. Zimmer expects to sell 15,000 units. The sales manager predicts that next year’s cost will be \$60,000.

Required:
Comment on the sales manager’s cost prediction using CVP analysis.(Cost-Volume-Profit)
.

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### Last year Zimmer Co. sold 10,000 units that cost \$40,000 to produce..docx

1. 1. Last year Zimmer Co. sold 10,000 units that cost \$40,000 to produce. This cost included \$5,000 in fixed computer resource costs, \$10,000 in fixed labor costs, and communication resource costs at \$2.50 per unit. Resource (variable) costs are expected to be the same next year. Zimmer expects to sell 15,000 units. The sales manager predicts that next year’s cost will be \$60,000. Required: Comment on the sales manager’s cost prediction using CVP analysis.(Cost-Volume-Profit)