Gross Margin Percent Essay

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Unitron Corporation The RSV method has a number of twists that can result in many different unit costs for the five
Question 1 products. For inventory costing purposes, any The idea here is to construct a "Produced systematic cost allocation system will do. The basic
As/Sold As Matrix" (400,000 x 400,000). Obviously, idea of the relative sales value scheme is that all sales the possible combinations are endless, so how does one should show gross margin percent equal to the average choose a "best" approach? The "best" solution is to gross margin percent across the full joint product set. start with demand for the highest value product (405) This average is 19% [(246 - 200) (246)]. This does and work back unsold production to the …show more content…
That is, we have not sold any for 160 days at the production decision? Since we average one new the $0.25 price. I would grab the order quickly!! batch every 2 1/2 weeks anyway, we are never more It is also probably true that once the toy than several days away from the next run. If it is not company becomes a regular customer for 50,000 or so yet time for another production run, they should ship units a year, the 400 will be reclassified a joint product.
3,000 402's as 401's. This really doesn't affect management decisions. In Unitron, the "working rule" for sales persons was easy: always accept the order if you can Question 5 fill it without going up more than one product level. There is no simple answer to the "proper"
Let production worry about when to run the next batch. allocation method. The impact may be purely behavioral. Equal unit costs will discourage selling
Question 4 low-end products because of their lower margins. Yet, The toy company may be forcing Unitron to the biggest demand is in the lower end of the product change its long-term view on joint products and by- line. Equalizing the gross profit margins across all products. The "seconds" are already large to be products would send the message that we must sell as considered a by-product (sales of at least 35,000 units a many of all the units as we can and substitutions are ok. year). They are only exceeded by the 402 product line But we don't want to
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