ww tanne Gm M. Matias "BSA -4B ACC 9/21 MANAGERIAL ACCOUNTING pol d. medina, epa, mse ‘CHAPTER TesT 1 THIRD GRADING PERIOD. TEST. PROBLEM SOLVING. Write your FINAL ANSWERS on 1 sheet of yellow paper. Avéid erasures: The Mitham Company has two divisions - East and Viest. The olvisions have the following wan Cones a 010) Sales ae . $720,000 co ase pele 80 Variable costs. Soro woman 370,000 . 240,000 £40) C40) ‘Traceable fixed costs 130,000” "89,000 KE. Allocated common corporate costs i70.c00 59,000 Sale 20 Net operating income (ios), Suop.oun siz.goo) sor Management at Milham is pondering the eliminaticn of the West Division since It has shown an operating loss for the past several years, f the Wes Divislon were eliminated, Its traceable fixed sts Could be avoided. Total comman carnarate ¢: sts would besinaffected by this decision. Given these data, The elimination of the West Divis:an Would result in BF Overall company net Operating income ot: Oger 2 The following information relates to next year's arojected operating results of the Aluminum Division of Wroclaw Corporation cn CisovT) Contribution margin voc we $1,809,000 fotiete 1000 Feed expenses 2 Net operating loss. sor) Mf Aluminum Division is dropped, $1,000,000 of the above fixed costs would be‘eliminated. what will be the effect on Wreclaw’s profit next year if Aluminum Division is dropped Instead of being kept? SMO dierent 3. Teen, is considering whether to continue to ma a co!nponent or to buy it fram an outside supper. The compeny uses 15,000 of tre compons nts each year The unit product eat of the component according tothe company's aurorption cost tecounting system is given fliers Direct materials. seni nmninnnnan § 7290 md Direct labor ween : 20 R Variable mnufacturing oversea na eh Fixed manufacturing overhead 400K od * On4 ot Unit product cost. “ ESURY) UST 40s Be S55 When deciding whether 1 make or bythe compo ent, what cst of making the component should be compared to the price of buying the comaonent? 2. oe ss Jordan Company budgeted sales of 409, ‘manufacturing costs were budgeted er unit, and fixed monutacturing casts at610 per unit. A special order for 40,000 calculators st $23 e sch was received by Jordan in Marca Jordan has sufficient plant capacity to manufacture the aculional quantity without incurring any additional fixed manufacturing costs; nowever, the praduction would have tobe done on an overtime basis at an estimated additions! cost of 5. per calculator. Acceptance of the specie! order would not affect Jordan's norms! sales and n» selling expenses would be Incurred. What « wolid Bethe effect on net operating IraarseiTThe vaca order were ceepted? Igo gue tenwae { calcula ors aGad)per unit last year. woud5. Marley Company makes three products (x, ¥ é 7] with the following characteristics: oe ca Te Cm ; x PY 2 Obalve= ven YF 4 bes Selling price per unit opt Variable cost per unit. eos “A Machine hours per vit ‘The company has a capacity of 2.000 mnachie» hours, hut there is virtually unlimited demand for ’ each produet. tn order te moaimize total eo: iusto margin, how meny writs wf euch preduct should the company produce? X {BH wah, YO, FO 6. Two products, LB and NH, emerge from 9 Joh t proves, Product LE has been allocated $30,800 OF the total joint costs of $44,000. A torwt of 2,009 units of produ(fLB re produced from the Joint process, Product LO can be sold at the plitoll yoiat for $12 Per unil, ar it can be processed further for an additions! total cost of $14.06 and thon sold for $15 per unit. produc€LIs 13 processed further and cold, what would be site offect on the overall profit of the company + compared with sale in Its unprocessed form Airectly after the sollt-off point? 26 * Is 100% datrcart Bayshore Company manufactures and sels Prout wails for s4st year are as follows: Sales (20,000 units at $250 ench) sisoooo — oinfegme Ca7e) Less expenses: Pride “190 _SMariable production 608t8....0.00 $900,609 As Zaales commissions (25% of sates) 325,000 Zsaiary of product line manager 190,000 Ge) FIs “Setraceable fixed advertising expense 275,000 Fixed manufacturing overhead!» 1eg.000 Tote! expences ausse.c00 Net operating loss. AS20900) Bayshore Is reexamining all of Its product lines avd i trying to anelde whether to discontinue Product K. Dropping the product would have no effect 0” th Lota! ibed manufacturing overhead incurred by the : company, 7. Assume that dropping Product K will have ny effect on the sale of other product lines. if the company drops Product K, the change in an ‘alist operating income due to this decision will BER DOVE Petree 8 Assume that dropping Product K would rest I! 9 $45,000 Increase In the contribution margin of F product lines. if Bayshore chooses to iron Produet it, then the change In net operating Income next year due to this action will be : SO TRertad ‘The Flint Fan Company is considering the addition o/ a new model fan, the F-27, te its current product lines, The expected cost and revanue data for the F-27 (ar ase as follows Annual sai sireimraensnmanene — WOOO WHS nt Cur) i Unit selling ple vosnselounaeon none 358 cmt Bou Unit variable costs: ‘ Production . case a aaa fom * Setting $4 Avoidable fixed costs per year: 230M Production. $20.00 Selling. $3.00 Hf the F-27 model Is addad as a new product tine, it s expected that the contribution margin of other product lines at Flint wil drop by $7,000 per year 9, ithe F-27 préuct line is added next year, no ching in opereting Income should be: ZC MCA 10. What is the lowdst unit selling price that cc sid ne churge for the 27 model and stil make it ‘economically desirable for Flint to add the weve prod.ict dine (905 Co 2 : Re ae Man eeate © DUT /‘The Talbot Company makes wheels that it uses in the production of bicycles. Talbot's costs to produce 100,000 wheels annuzily are: Nate | aoe boos. Ofrect materia} $30,000 3500 Direct labor... 350.000 gem Variuble overhead. $2¢,000, 5g _ Fed overhead... $70,990 ae WS. fopowxner WUso ‘An outside supplier has offered to sell Talker similar wine els for $2.25 per wheel. If the wheels are Purchased from the outside supplier, $15,000 of anmual lized ovarheae could be avolded and the {aciltes now being uses could be rented to anather company for $48,000 per years 42, IF Telbot chooses to buy the whee! fram the out ide supplier, then the change in annual net operating Income dueto acceptini:the fferis: 3 y¢nigy mmewaxe. 12, What isthe bighast price that Talbot could pay ine outside supplies for the wheel and still be economically indifferent between makingorbuvingthe wneels? qo y Chmil) = sooo 2 IG Melbourne Company has traditionally made o subcomponent 6! 20,000 subcomponents results in the feliowing costs: “8 major product. Annutl production of Knke-/bey la. be Zp ert Raga a $53 peru Regis Gecdento pore wr te pugs 680.00 oF he Noreen we overhead will be eliminated, and the company may ve .ib'e to rent the facility previously used for Fou manufacturing the plug, aS 15. Wf Regis Company gurcheses the plugs aut does “ot rant the unused facility, the company would save (lose) $_perunit bse 3 / yn 426, if the plugs are purchased and the facility rants 4, savings annually, To achieve this yosl is Company wishes to realize $200,000 in. 9° *3 $9, ine miniinum annusl reat on the ity must be: / 9p ou oom 47 Anringer Company makes 50,000 units ex vear of = 2" t uses inthe products it manufactures. The Unit product cost of this part Is computed as follows Mabel buy Direct material. . sis ng Direct AbOF hee ssn 4 ws erat Varlable manufacturing overhend crn ay Fixed manufacturing overhead at Unit preduct cost. Bee i TO: 10 Acta supple has terest sae compey al these parts treed or SOD unt the omen acapis this er, the fciie now Being us" 1a ake tne ure ceule om ee, aoe ‘The edition: | contribution margin on this other product 3= er unit. This cost AB, Regis Company makes the plugs it uses in one of its products ai a cost of eh corel ene includes $8 of fixed! overhead, Regis needs 30,000 3 these plugs annually, er ortan Company hes offered to sell them to Regis at $33 per unit. if Regl: decides to purchasethe plugs, Se ea ‘annual fixed overhend will be eliminated, and the company may be able to rent the facility p used for manufacturing the plugs. fer per unit for the ‘What is the maximum amount the company should ne willing to pay an outside supplier p Part Ifthe supplier commits to suaplying al(S0,000 units required each year oducts, which is used in the Seagal ne: manufactures industrat omponen: = One of is radits, wr ne Construction of industrial air conditioners, Is known 9s 053. Osta concerning this product are give! OM Fam. Selling price $150, VE te make Direct materials. sae & Dlrect IMLOF overenn “ r ‘Variable manufacturing overhead gut Fixed manufacturing overhead. si? Variable selling expense .esuansnn 82x Fixed selling and administrative expense... sis The above per unit data are based an annul gradi cilon of 2.001 units ef the component. Direct laber ean be considered to te a variable cost ie be considerad to b S Pde 19. The company has ceceived « special, one-time-only der te S0R)units of component 053. There would be nevarlabe seing exoense on ns special orde: andre total fed monutoctertig varhend ane the satng sa instst ooneeee ee aT be affected PLane order. Assuming thot Docker ho: «scwsscomaety und can fit he eraser without eosng backon the production of dny produc whist sta mitiTum price per ult oo the eee Below which the company shouts not g re ete meany Nas received special. one me-cry order for 300 units of eamponent 53. There cece Royale sling expense on ths cpecalorder and the total feed wanaiccreog Seg ats Med Seting and saministat ve exaenses ofthe company would ner he cer ed ‘ig order. However, essume that Cocker has no excess capscily and thi eet al eee Producti £2 minuter ofthe constrain a cexuyrce, which could be used festoe tne ace products with a total contribution margin What is the minimum price wer unit on she ‘pecal order below which the comeany 31 S3T7OE go" 9:7 Lage See ‘The following are the Jensen Comper Item at @ volume of 1,000 Y's unit costs of making and setting an i ‘units per month (which cepresents th "@ campany’s capacity? Manufacturing: Direct materials, 8190 Direct lator, : $2.09 Variable overhead .. $C 50 Foced overhead vances $6.40 Selling and Administrative: variable... menventss $200 Fled oh 80 80 Present salgsagmount to 700 units per month a arder age ¢ market fo(499 units. the order would not afiect vay sre Lab aes nd eling and edminivatievare cotart waite oe sacar eat The variable seting ano acm se exer en special order as well as for all other sales. amare "arg between 760 ni 'o be incurreg On this a‘This problem replaces no. 18 in the questionnaire 18. Sardi Ino, is considering whether o eantinue {1 make a component or tp buy it from an ‘outside supplier. The company uses |7,00'| of the components eacl{ year, The unit Product cost of the component according t » the company's cost acobunting system is given as follows: Direct materials... Direct labor rennin Variable manufacturing overhesd Fixed manufacturing overhead. Unit product cost... Assome that diree: labor is « variable cos: OF the fixed manufeotaiing overheud(J05) ts avoidable ifthe component were hough fom ihe cussi¢e supplicn pr addin ‘the component uses 2 minutes on the maci ine that is the company’ current constraint. If the component wer bought, this machine ime would be feed up pruse on suotaer product that requires 4 minutes on the con \training machine and that has a contribution, margin of $7.00 per unit. When deciding whether to make or buy th: component, what cost 9f: making the comronent shoul be compared to he p07 bayng the compongne? py]: open dane we q ‘ bs ey ra 21. How much will the company’s profits be incrvased ir [decreased] I t peices the 209 units at $7 one (30 increase 22, Assume the company hag 50 units let over trom last year which have small detects ard which \ail have-to be sold at a reduced grice for scrap. Th? sale of these defective units will have no effect on the company's other sales. What cost js relevant as a guide for setting a minimum price? Naposte se or fallowing unit costs are incurreae wl aie eee - ° : o£ cm aqme on fel CXIBRD > Gary rect mate HB cence ss wey s DWrect borin sso SE Vouk wate SOE tree = Fad lable manufacturing overhead $075 - iaeWee ” “rer Fined manufacturing overnens $150 If = beers n ymilaaigearternrn oc gba AaB roel Fined odeninlztrotve exper. cee $1000 mike» 600% sen gnes, costs, Both manufacturing and administrative, ar constant in total within the relevant rare 9f 10,000 to 15,000 hake per month. gg Malls Company has racelved a special order froin ¢ cu: tomer who wants te pay a reduced price of $10 per hak There wouta ocean pxpense in conus. on wath this special order. And, this order would have no effect on the Company's othar sslay BAI, nes Ose sales 28. Suppose the special orcer Is fo@_ 00D haks this mevith If this offer ls accepted by Melis, the sompany's operating Income foP he month will in rease (dacrease) by eee FURS Pe 4 24. Suppose the spacial order is for 6,000 haks this mec nth ang thus some ragulgnsales would have to be given up, If this offers aecapted by Mols, ths compary's opeTsline Ineenetor eh toh will increase (cecrease) by 5 GD Mmcreane sents Company produces a single product. the cost of pr: ducing ane selling a single unit of this product ar the company’s normal activity level of 76,000 unite per iaonth tz as follows Direct MALElals. eee unum $11.40 Techn Ht gg Direct labor ae nee $7.10 ee Veriable manufocturing overhead . 40 “at ‘ Fixed manufacturing overhead... . $28.30 FAY srg Variable selling & administrative expense ° $1.00 -9-% =0-4 a re Fixed selling & administrative expense vu... $6.10 BF — "e normal sling cw ofthe produet i685 eSloer vi seca ae enen "elvad from ar oversens custo 04,000 units to be deliverné this month at@ change these rcs, Tne order would have na affoct ithe Compas normal sles andre ie oy amount of the company's fixed costs. Thy variable selling and admintscrative expense less per unit on this order than on normal sales, Direct labor Is a yarlable cost In this company, i, 75. Sunpose the company is already operating at cay: siv.when the special order is received from stoner) Fy gt WOU Be the eBpor unity cost of each unit deliveree eg te overseas customer? 43.4 26. Senpone ther sot enough ll ebay to er. eof ha unis for he gvreens cum repssereeg.te eA oder would revi cs ng bask an proguston SCS eee ome GAAS REMC etromers me mim aceae prc: un ore pea gE 44X10 = ay x SDs e sips 2 Es 02. ay S ne aeThe Melrose Company produces a single roducs, Prt duct C. Nvielrose has the capacity to produce 20,099 units of Praduct each year. IF Melrose pred ce Zell one unit of Product © are ay follows Direct materials. $0 Direct istor om $7 variable manufacturing oveshead. $3 Fined manufacturing overhead... sa Variable selling expenve $2 Fixed selling expense “a 6 at eapacky, the per unit costs to produce and oe Po oor Gt Teour samen Fore Itx0s Som bast [0500 7% A spoviat order has been received by Melrose \LMlosPe Company to,purchase 7,000 units of Pre duct € dur ing yea. I this special order is accepted, the vatfable selling expense will bv recuced 6 fixed manufacturing overhead and fixed sellng expenses would be unaffected except That Melrose will need to purchase @ specialized machine to engrave the Moore namie on saci unit of produet € In the special creer. The ‘machine wil cost $10,500 end will have no use after ihe special order Is flied wn th, he bow par ‘Assume that Melrose expect to sel 60,060 sits Of Prouuct C to rugular customers next year. At What selling price for the 7,000 units would LZelrose be economically indifferent between accepting and rejecting the special ade: fron Moore? Fg. 5 Pe a 28. Assume Meirose expects to sll 60,000 units of Produrt C xo regular customers next year If Moore company offers to buy the speci’ u's 1 $90 pur unit the eect of accepting the es spechVordartensuavoca's ct cpesyriog meager pemt year winine: 2 peroe rene Ten ia CHE PSS ROR 3 29. Suppore Melrose tan se($3)000 units o! Pr duet to -egulo customers next year If Moore <_, $01sm Company offers to buy thespecal order unl s 9¢S95 pee unt, the effect of necenting the special con SBIR srdertor 7,000 ints antelrores net opsrs dng mcome for next year wil Oca SPAeUe inerenee © Gero Broyles Compeny Mikes. four products na single ity. These produets have the following unit product cost cm ath Otfom Awe 22 ©) Bred 1222 © Direct materials, 1070 Direc abo" i830 acne Variable manufactring overnend fe Ure Gy Mores Fixed manotacturing verteed. vom $a Unit prosuer cot Bua Product € Grinding minutes per unit... v4 220 120-190-180 Selling price per unit. 365.40 $98.59 $70.70 $76.20 : Varlable selling cost per unit. 53.0 $2.00 "$3.40 Monthly demand in Units... 4,000 4,000 4,000 The grinding machines are potentially the consteat™ i produuiton focility. A votol of 24,400 minutes are available par month on these machines. Direct labor is a variable cost in this company. 30. whieh product makes theCEASDprofitble use of vue arinding machines? AT : = 21, Whlenproduerrekes tndMOSFpromable ute cise prinaing machines? (3 232. Us to how much should he company 6 w lao psy for one aeanal hour of gaging machine time it the company hes made the est (Round off to the nearest whole cent.) pit nfo ‘ne oF the existing grinding machine capacity?‘The Madison Company produces throe products with Selling price per unit... Variable cost per unit... Direct labor hours per unit Machine hours per unit 820 sig 38. Feadlacn has tint of 30,006 aire labs) Products shoule be producadrie THeaTTs Tre BG 7 34. IF Madizon has. limit of 18,000 machine Products should be produes: J in the order: 9.009 units of R yield! 20,000 tion costs total $90,000 per produc off point. However, B can be proc. ‘S0ld for $7.00 per unit, PD wmope Paulsen Comgsny makes we products, W end, W ane{60.009 unis af bare avaiasie each ein ka Bld at che spitot pain for ssioo ee win al processing costs of $3.10 per unit will be im 36. 1@} orocessed further and then sol, rather Monthly net operating income would ine incre 37. What would the selling price per unit of Proou-i » Paulsen Company to be economically indi'ser, Processing Pfurther? gS Bockhem Company makes two produets from a camr Point total $33,600 a year. The company allocates the total sales values at the spit-off point, Each prod.set further. Oata concerning these products appecr bu iow Pr Allocated joint processing costs Sales value at split-off point Costs of further processing... Salos value after further processing .. 38. What is the met monetary advantayy (dicadva Point? B4OD inueae. What Is the net monetary advantage (disode Point? nary i 0. What is the minimum am split-off poing? 39. }OURE the company st SOUD= 2G y50 = 41 per unit or it can be further processed and 08 following costs and sellipg prices: Maer ye fem DL ¢M/DUm As Be # C8 2 ee 1S bua $20 C1 wip 2 4 @ sia MH cufme 2 as Y as § 23 Ts ey Urs but no limit on maching hours, then the thee Dut no limit on direet labor hours, BA en the three: Wa joint process from a single Iput, R. During @ fits of & and 20,000 units @f 8 at the split-off on run. The Unit selling price for & is $4 and for 3 sed further ot @ total cost af $60,000 and then "AT $00 S14 fay 5.8 es ange in operating income fram a production Me: 6 OUD inereHe Tint process, At the split-off point, $0,000 units of ‘Hy joint production costé are $290,000. Product "roduct P either can 59 so atthe salivof! point 'c for $7.20 par unit, If Pig processed further, vai > 20 han being soKP Bt the splitbot point, the:change'in we (deeroee} Of 8 SOE dlecrcmse Neer to be after procabsing In order for rsbelneen seling ? at thd split-off ponte, 2) Input. lolnt processing éosts up to the split-off & c0st6 to the joint pradudis on the basis of their oy De sold at the spllt-off doint or processed x y hi emery Ther de aren 2 $19,600 $3§,600 v. Ts $28900 $8000 Lom Te Gen > gaaee $59800 0 BEG ” Saaey Y $48,500 $98,800 "00 3 processing rredul @pevond the pinot 3 “8#) of Brogessing Praduft Y bevond the split-off outs accept for Product x 23q0y 50% of practical Rapacity. The slew the prezent level oF 10,000 tons of (WIE Sand the variable ebst ner ton is $2. theag Wits t0 be sold at the‘st what sales volume per month real ne AD/I > Geary oe Monagement is concerned that 9 furtiver uni Ifthe company accepts this offer, the facilities tomake more units of » product that isin he! this other product would be $352,000 ner yea jon s atic, all of the d Ifthe part were purchased from the would be avoided.However, $21.90 of the "ix 6 manut the part would continue even if che 6: manufacturing overhead cost woul he aph aman “he direct labor-hour, which was calcu Variable manufacturing overhssc! $120,000 Fixed manufacturing overhead $560,000 ' 35,000 Direct labor-haurs. Compenent 76 is used In one of the come: component according to the compary’s wost .09U! > 4.00 Direct materials. 2 00 Direct Abr pe aaa Menufacturing overhead applied Unit product cbst m7 ‘An outsida supplies hos offereci to supply con pocint £6 0 fenowen for quality and reliability, Assume tha: direct 'obor Is renufaeturing overhead Is realy driven uy di ect #0 overhead would not Is the offer from the outside supaiier Fingacieity attrac: Direct materiql . $38.60 Direct labor «henson $9.70 Variable mangfocturing ove! $2.30 Fixed manufagturing overheas $18.10 Variable selling & administrative expense $4.70 96.80 Fixed selling & administrative expents how bein: used to maka the part cou ‘The additions! enntetbution margin an the company should & willing to pay an outside ving all 20,000 units eoquirad each year? 3Q. thw 10) anys predutermined ovechead igwing budgeted daca: Fe anys prausets, The unit prod A/BEE Ct the ring system Is devermined as follows: rigble cost, variable sours, and tote! fixed manufacturing ‘be affected by this decision. Quian chronically has idle eapacity. se? Why? product, The cvst of are ducirg and selling a single unit of this ey level of 40,000 units per month Is as follows: Be used ct labor cost of the part faciuring everkead cost being applied £0 vart were purchased from the outside supplier. This fixed fe company’s remaining products. supplier per unit for the Door ut cost fe make Tow, on : reps ‘SACs thee > B tom pay +OM gs geaacdt tt es Jach, The outside supplier is No, Ne pact the CO I 5, wy fv bulan iS BS HAE TY an fae 14 Tachoademng 38-8 rt Le [-F- O- F2634a, ‘The normal selling price of tae prowuct H{Sw2.19 ber unit ‘An order has been received from an ovore0.4s 1s ten [or 3,000 units to tng dolivered this rvonth at a special discounted price. 1 order nud hava no affect an thefcompar's normal sales and wouid not charge the Yas mayne companys aed ost, The varabe sling fan administrative expense would b47S0.70 ihe oer unit on this ordoe than on normal sales css nen. caw athe bey ma » Direct labor is @ variabie cost in this company te. 45d 2 2D 4. Suppose the company as ample iets capacky ro pratuce the units reagited by the oversea customer and the special discounted priee 00 1 ‘would this special order increase (decronse) the month? — GqGoy. Merene 45. Suppose the company walreaoy operating» capacty when te spacers received trom the overseas customer, wht would betty crporieaty cost oCsacn fabaelvred to the overseas customer?, 28. le 2 swrerial order 8,575.90 par unit. By Row much pany’ net operating Income for the 8: Sugpote tne company cos nat hase aang, lecapaety to produce of of tants fr the oversee caster an ecptng ne peor rege cat spccan orocueono "000 uni for oglgpaptgmat What way ahr mom scape pert othe Nee Se yt ms special ovces? Rego = oh Eye ta EE ip srw mmm mow = WofA7F 2 Fixed manufacturing overhead . 575,000 TM Bo pam = NS HO/ Bie Weide) As Ss Pk Management is considering a special ores for £09 units of product NESE ay rach. The ele norm selling price of product N9DE i $ne and vent product cost detaotfed 9 Fellowes: § 7 as x Bw Direct materiols sinan BB oR Direct labor: a 22.50 Vow fn Manufecturing overhead apaviad . 3a50 Tens Ve OF Unit procuet gest $85.00 5 the special order ware accepted, normal sale. «ut thls and other preguetd wou'd Go) be affected. The company has ample extast ae 7 the adationpron uee the additions units. Késurne that nz overhead is really éifyen by direct labor- * youl not be affected by the special order. Ifthe special order were accented whri would direct labor is variable cost, variable mierutas hours, and total fixed manufacturing overne, mewmpact on the company's overall profit? 5 ery jee Avamyan Co, manufactures and ses riedals fc sinnre oF athletic ond ofher events. Its rmanuactring plant has thw eapcty fo prot“ DX nagar oct eee ety rare Qia9 er bal Coda or te Production is 12,750 medals. The company r eurrent level af production are shown below. Variable costs e Direct MACEHAI same nse 24,750 73 vs, 3 Direct I880F mnie 6,000 carr as Selling and administrative... 15.300 e Fixed costs: Manufacturing nnn Selting and administrative .. b oy Pn ble las of i ‘ivr f0% 700 medals at $83 each. For this * ost Would be Incurred. This order ‘The company has just received a specia! one particular order, no variable sellag and pee. Would also have no effect on fxed conte Should the company accept this spaelal order Ys, ei | FOO eae Dy trcame qa9, Albertine Co. manufactures and sells trophies for winners «athletic and other evomts. Its manufacturi 1s the capacity t 1 Capacity to produce 16,020 trevhles each month; current monthly Production is €2,80Arophies. The company normally charess $224 per trophy, Cost dato for he cutrent level of srgduction are shown tenes Variable costs: 214 we Direct materials. siaaco FAeftaure | Direct borg £36,000 neve Selling and administrative 35,840 eras, Phred costs wt oo ow Gt Manufacturing. 7 $294,400 te 2 8 Selling ang administrative 394,720, ge ani P - we parculor order, np vriable sling an! ain suave Cone MUNG Se meres order would also have nB effect on fixed conts Bete One NEE ne incurred: This orde Should the company accept this soectaterder'vhy? Ne, SYM Recrenw ™ Drure 50. Holtz Company makes three products in s sin fe facility Data concarning these products f — ype ee nit is és S49 TR Selling price pér unit 78.907 $71.10 $73.40 ~ te ee PEL SAS Direct materials... i2e7 saaz0 ssaa0 0 BORG PF 6 O2@ 4 61-4 Direct labor... s2120 Sisa0 sige Co 1? HO Variable manufacturing overhead $480 "$5.60 $7.60 Variable selling cost per unk suag 3250. § Mixing minutes wer ust ES SD 307 Monthly demand in units... o 4 Tt 2050 at *E{0 i 3a The mining machines are potentially the cor! is the production faciiky, A tot of 12,500 Thindtesare evaligdle per month on thece mo hints. cea macho 1c labor is a vaylable costin this company 6 mastinize net operating income? (Round off Faege How much of each product should he prog“! J ver, cs wo tothenesrest whgle unit) AGO, B Iden Company makes twolproducts from # common it aut lniat processing costs up to the split-off point total $64,800 8 year. Tne company allocates those co:"s to 7h joint products on the basis of their total sales volves at the spllt-aff polnt. Each product may b + cold >t (he saltioff point er processed further. Data concerning these pratucts appear below: Product Product¥ Total Allocated joingprocessing costs... sa7.00 $32,090 $64,800 Sales value at split-off point $36,00¢ $36,000 $72,000 Costs of further processing... 579.306 $14,300 $34,600 Sales value ofter further processing, ss6.a0¢ $83,000 $108,400 51, What Is the net monetary advantage (diss Wwantzge) of ueocessing ProduefWbeyand the splitoffpoint? "40D disadvanhge. 52. What Is the net monetary advantage [ilise hve aaah e ot it for Prod Jif it Is to be sold at 53, What is the minimumamount the compar y showid accent for Produc is to be sold at the splitoff point? a ee LY 54, What is the minimum arnount the comps. y should accept for Product ¥IFit is to be sold at the split-off point? SAUP —[ynm= IBF of processing ProducCYbeyond theA Witson company es POSES the Following re changes described below. Resin y Product A sales hoo Variable costa mer Contribution margin # 60 Fixae costs - aveidabis (20) “unavoidable (33) Profit (loss) The unavoidable costs are 2,000 B. allocates bas CONSIDER EACH QUESTION INOEPE ips NTLy UNLESS TOLD OTHERWISE. on unit sales of 2,000 A and SS+ Compute Wilson's income if product A ia aropped. 2 S6- Te Product A were dropped and the unc sins of prodvet B increased by (4) AON, wnSE wouLG the Combany's Sncene bet Boy [S0\ 87+ Exeguce & can be sropped and repince ! with 9 new product, C, which would have avoidable fixed costa of 2, Product C woulp sell for fee £0-60, nave variable costs of $0.20, snd expactad volume of @00 unite "0 Pep Compute Wilson's income if A were bo wace! by [20 ° 58. Suppose now that products A and & ar: joint provucte thar aze being sold at splitrofs. All ot the costr siown on the ineome scatement are he materials, labor, anc ovasnead < rhs joint process.) Find income Lf product B were proce. apes, fa for 3380. bie Arapahoe Cozp. can make three products coat of the Joint process 45 510,00) proguete. Sales Value Product, 59. Which product is) should »% 60. Arapahee is currently pr 61, Madison Co. operates 2 joint process. fom that process, each of which can be =: farther. Monthly output is 56,000 gai lor You have the following informacion aso Per-gallon split-off price Y 2 Per-gallon price after further processing a 9 Por-gallon variable cost of further processing Avoidable cirect fixed costs .cf further processing, per month Unaveidable direct fixed costs of further processing, per month © Which product (9), if any, should be so Milton Company has three products: A, Produce the products, The conttisut i: each machine [in minuto: fe as follows b additional costs pf $90 aw tio > Oe | Coste of Adsist Lona, essing, sue C190) 15oD three produces eather than Find its current incom: a sole forse FUF pote CSF Enees products, B, &, and O emerge 90UD “_smediatessnor proces! Cy ISN ie" G ana od 16 v. SORE eoIEEES 8 UR ag om or Be St. Wei 9315 sh2 yy G8 eo $45,000 $26,000 $49,000 5 2}000 s sare used co , sales demands,i and tine on flBoy DO tae : MG Age #6 40 16 =— 8 = : é 9M sen ann : 2 5 Bee 3 ve Box ~yoy é eo bie fi ow 30K WaGmThere are 2,400 minutes SASH machine cusing the weet. ai, oe TOR rete Tlala Teedah are tea aan a just i VRE Lon mene fs ee borden? ya + Mow many on na et? % YeniES OF ALB, an Foe eeogced airing cho manne Aad? BaCroase Compan | dering ony ot C= Gu che changes See oa Sales are a; Ms tM Variapie costs ene s t ve Conteivacion mecuin i iF ixed conte — ait San: 2:4 x 200 = Unevoteenie wD bx4e . @ a Protis (ose) ~— 2 BSaB"STAIELG coats are stiocee. basce cn unis eatay of 1,009 9 ana 2/0008. An eaoorses Ao St20cts per unit for 200 untae oe ae # bunts oye 54. Find the etlange tn inc *TesSe accerca the order, assuming no Agme hone of rogyiat site: om $8. The manageds believe thar a tel onder, they w: ate love sono edine et the veiuis {nel She nonbae’ of on > . ey sould lose before Cee tty, Unpeotitasie oh Ln we oWynwe (7 eons aoe SS Phsgannageze Believe shee they ls) oss a0 unite ae ene coaee price = 70D = tho SERNGY ASchpe She orders cat? {ice Sot 9C unite ut sn chatge fel the special order ts incieass Oem So 3g Laae Mays Company nansfactures 200, + 88 pert x2 sanuatty, The following = information has bken coliecsco 0.6vBO B55, taceriate $200,000 1 fete pug tovttaoe, bu Direct Iebor 2.80 oes 1g 2 Tee Yariabie overnesc —*50'909 % . Fined ovechorsh = 207009 Oo? tot KDE FS sty Totat costs ORMOE proauetie vee ot ihe Shui a sen 67. What would be the dollar ime Beepted the otter? go Dep, mane 68. What Lo eid maximum price my "20 pay tor the parte pg Scnzalez can produce any of thee ps. tt its current production line, The heat treating equipyone nas s0b'y ule suring any given montn® . Ber unis pradvet fon, sates, and eae! Ws 95 BEE FE eee Ecce . op om $9 So Woe Ths: (60 setting price, : rer) i das: (6 yvozsan cont Lore SSH 3* BO 4, + 2b Required tinejin neat tress kak ig ra TARAS *gieninin oenenp rar state ; eS 00 = 5 oO Be » 69+ flow many Gf each product show J procuce and seli> ‘ a ceo aH EAD a0. gupyone che setting 9 . © #12. How miny of each GG +ifo “product shbutd Gonzalez pious Ly ; & Cain 12vp Ye CM we CM/Lot eo Ay 2m ww © so b Go ar as > a2.14 6 Seottso Entezpeisos hes tne to: : © 8m 40 350 as w Aa © = itm Unit demand por monea CBA 2 Yow Belting price 3 [a3]? -_ eon Materials ~ Cor Labor and overhea: Geom Soles connission Labor and overhead ace oppiied to aa Machine hour. Manegenent consiaere Cth 72. Scottse curvently has 60.009 no soauction each nonth. i Now many units should be predcocd s A=W, Ballds, C=gn 12. Ap exporter hes approached scot-es product € for 9 diseaunted price, chee affect nozmal Sales. no conaiaason Scottse shouid sccepe® Wiomi Company currentiy se Varlabie costs are $0.40. allocated Fixes ‘coate are Sic8 sf 'hes offered 80.98 sero 800 units of product A. 0-63 x movo (A4F0 FPSO = TID 73. Find che change in incom af ian the seser withous attecting surrent caies +yTRe menegare believe tho: i they e:cest the special order, OLS FS iese some sales the regular pri Deter t they cove! lose before tha ordes herins Gapret reams ual ag 0.6860 Eel lesnaste u ° Bog wm Of og i fe managers beliove cha they « e770 onize az the reguier vin ¢h0 price sf they accept the « a he price they wust charge fOSAGUD for the special ortor ve 08s fee Tee Aepegaio Company manufactures 1, ys The fottowing BEE information has been collected bsS.Stte Maceriais $200, 000, = ess. Direct Lepor 110/000 Variable overhead Be Fixes overhead Total costs Wobile Company has offered to provic- Arpeggio accepts the cffer arot vacated, saving $60,000 s year in 76. whae wourd be the tiollar impac 77, Whee is the maximum price Arpeso: 78, Colfax Company expecta ta incur ene f+ Production level of 10,000 units Direct materials s109,0¢0 10 Direct labor 120,000 12 Variable overhead 60,009 G Fixed ovechead 30,000 Boe wedling price, ts G59) ver uni 5 city of 10,080 units. caps unite by operating overtine, vYarss. for overtime production. fixed cvs! overtime cperetions ocsur. Coltay fzom a whelessier who has offered tg the impact on Coltax's operatin accepted? Ray s unit. r¢ nte ine 5p: ds Siosgai> accepted the offer? WOW Ihren Se Poy 25e che care? 42y lowing costs at the planned uh Map 10 woh te. vii® og oe ats “ S ba an ar cepsny carrencty, operates act” {__ 25 be increagad 5°13, 3 sncrease Geld porous — Boye “egna"taneda Ghchangea wien woUnns taceivedaeptelal eae. 4/000 untes ee Fiance, whee me" SE this specseronden’ w FOR Mena 2