2. Calculate the company ' s total weekly gross profit assuming the table cleaner is processed further.
( 2) Gross profit $ 186,000
3. Compare the resulting net incomes and comment on management ' s decision.
2. using incremental analysis, determine if the table cleaner should be processed further.
E8-2
Eckert Company is involved in producing and selling high-end golf equipment. The company has recently been involved in developing various types of laser guns to measure yardages on the golf course. One small laser gun, called Little Laser, appears to have a very large potential market. Because of competition, Eckert does not believe that it can charge more than $ 90 for Little Laser. At this price, Eckert believes it can sell 100,000 of these laser guns. Eckert will require an investment of $ 8,000,000 to manufacture, and the company wants an ROI of 20 %.
Instructions a. Determine the target cost for one Little Laser.
E8-6
Alma ' s Recording Studio rents studio time to musicians in 2-hour blocks. Each session includes the use of the studio facilities, a digital recording of the performance, and a professional music producer / mixer. Anticipated annual volume is 1,000 sessions. The company has invested $ 2,352,000 in the studio and expects a return