Symbol Manufacturing Inc

question 143

Essay

Symbol Manufacturing Inc.makes component parts for automobile navigation systems.For component A14 direct materials cost $47, and the assembly technicians are paid $42 per hour.A technician can produce two components per hour.Fixed manufacturing costs for A14 are $70,000 per unit based on current production of 12,000 units.Non-manufacturing costs are fixed at $120,000 per period.Each A14 component sells for $195.Required:
a.Prepare an income statement in gross margin format.
b.Calculate the dollar sales required to generate an operating profit of $1,500,000 and prepare an income statement in contribution margin format.
c.What actions could Symbol Manufacturing Inc.management take to lower the required number of units sold necessary to generate the desired operating profit?

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Definitions:

Technology

The application of scientific knowledge for practical purposes, especially in industry and the development of new products or processes.

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two or more goods given a set of inputs.

Outward Shift

A movement of the supply or demand curve in an economic diagram indicating an increase in supply or demand, leading to changes in price and quantity.

Consumption Level

The total amount of goods and services that an individual or group consumes over a specific period.