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Advanced Management Accounting
Last Update: 08-Sep-2024
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Kaizen costing is being used by an organization to gradually reduce the unit cost of one of its products in order to achieve a 20% mark up on the product's cost.
The selling price of the product must be $72 per unit and this selling price has been maintained for two years.
Two years ago the product's cost was $3 per unit more than its selling price. Kaizen costing has achieved an 8% reduction from the previous period's unit cost in each of the past two years. The organization expects to continue to achieve the same rate of cost reduction next year.
Which of the following statements provides an accurate analysis of the extent to which Kaizen costing has been successful in achieving the required unit cost for the product?
LL produces an item, the Z, for which the demand curve is estimated to be:
P = 10 - 0.0001Q
where, P is the unit price in $ and Q is the annual sales volume in units;
Marginal revenue (MR) = 10 - 0.0002Q
The variable cost of producing the Z is $2 per unit. The annual fixed costs of production are $110,000.
What is the profit maximizing output level?
Which of the following is a key objective when agreeing a basis for setting transfer prices?
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TESTED 08 Sep 2024