Managerial Accounting

15th Edition

ISBN: 9781337912020

Author: Carl Warren, Ph.d. Cma William B. Tayler

Publisher: South-Western College Pub

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When prices are rising (inflation), which costing method would produce the highest value for gross margin? Choose between first-in, first-out (FIFO); last-in, first-out (LIFO); and weighted average (AVG). Evansville Company had the following transactions for the month. Calculate the gross margin for each of the following cost allocation methods, assuming A62 sold just one unit of these goods for $10,000. Provide your calculations. A. first-in, first-out (FIFO) B. last-in, first-out (LIFO) C. weighted average (AVG)

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When prices are falling (deflation), which costing method would produce the highest gross margin for the following? Choose first-in, first-out (FIFO); last-in, first-out (LIFO); or weighted average, assuming that B62 Company had the following transactions for the month. Calculate the gross margin for each of the following cost allocation methods, assuming B62 sold just one unit of these goods for $400. Provide your calculations. A. first-in, first-out (FIFO) B. last-in, first-out (LIFO) C. weighted average (AVG)

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Product MM is normally sold for $410 per unit. A special price of $380 is offered for the export market. The variable production cost is $270 per unit. An additional export tariff of 30% of revenue must be paid for all export products. Assume that there is sufficient capacity for the special order. Prepare a differential analysis dated March 5 on whether to Reject Order (Alternative 1) or Accept Order (Alternative 2).

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Accept Business at Special Price
Product A is normally sold for $50 per unit. A special price of $32 is offered for the export market. The variable production cost is $24 per unit. An additional export tariff of 13% of revenue must be paid for all export products. Assume there is sufficient capacity for the special order.
a. Prepare a differential analysis dated March 16 on whether to reject (Alternative 1) or accept (Alternative 2) the special order. If required, round your answers to two decimal places. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Differential Analysis
Reject Order (Alt. 1) or Accept Order (Alt. 2)
March 16
Reject Order (Alternative 1)
Accept Order (Alternative 2)
Differential Effect on Income (Alternative 2)
Revenues, per unit
$fill in the blank 3f481bf3bf97fe8_1
$fill in the blank 3f481bf3bf97fe8_2
$fill in the blank 3f481bf3bf97fe8_3
Costs:
Variable…

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Product R is normally sold for $45 per unit. A special price of $32 is offered for the export market. The variable production cost is $26 per unit. An additional export tariff of 15% of revenue must be paid for all export products. Assume that there is sufficient capacity for the special order.
Prepare a differential analysis dated March 16, on whether to reject (Alternative 1) or accept (Alternative 2) the special order. If required, round your answers to two decimal places. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Differential Analysis
Reject Order (Alt. 1) or Accept Order (Alt. 2)
March 16
Reject Order(Alternative 1)
Accept Order(Alternative 2)
Differential Effecton Income(Alternative 2)
Revenues, per unit
$fill in the blank 722a4ffa8fe5ff6_1
$fill in the blank 722a4ffa8fe5ff6_2
$fill in the blank 722a4ffa8fe5ff6_3
Costs:
Variable manufacturing costs, per unit
fill in the…

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Accept Business at Special Price
Product N is normally sold for $42 per unit. A special price of $33 is offered for the export market. The variable production cost is $23 per unit. An additional export tariff of 16% of revenue must be paid for all export products. Assume that there is sufficient capacity for the special order.
Prepare a differential analysis dated March 16 on whether to Reject Order (Alternative 1) or Accept Order (Alternative 2). If required, round your answers to two decimal places. If an amount is zero, enter "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Differential Analysis
Reject Order (Alt. 1) or Accept Order (Alt. 2)
March 16
RejectOrder(Alternative 1)
AcceptOrder(Alternative 2)
DifferentialEffects(Alternative 2)
Revenues, per unit
$fill in the blank
$fill in the blank
$fill in the blank
Costs:
Variable manufacturing costs, per unit
fill in the blank
fill in the blank
fill in the blank…

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Accept Business at Special Price
Product A is normally sold for $9.60 per unit. A special price of $7.20 is offered for the export market. The variable production cost is $5.00 per unit. An additional export tariff of 15% of revenue must be paid for all export products. Assume there is sufficient capacity for the special order.
a. Prepare a differential analysis dated March 16 on whether to reject (Alternative 1) or accept (Alternative 2) the special order. Round your answers to two decimal places. If an amount is zero, enter "0".
Differential Analysis
Reject Order (Alt. 1) or Accept Order (Alt. 2)
March 16
RejectOrder(Alternative 1)
AcceptOrder(Alternative 2)
DifferentialEffects(Alternative 2)
Revenues, per unit
Costs:
Variable manufacturing costs, per unit
Export tariff, per unit
Profit (loss), per unit
b. Should the special order be rejected (Alternative 1) or accepted (Alternative 2)?

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Product R is normally sold for $52 per unit. A special price of $42 is offered for theexport market. The variable production cost is $30 per unit. An additional export tariffof 30% of revenue must be paid for all export products. Assume there is sufficientcapacity for the special order. Prepare and show in solution a differential analysis datedOctober 23 on whether to reject (Alternative 1) or accept (Alternative 2) the specialorder.

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Jacoby Company received an offer from an exporter for 21,200 units of product at $16 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available:
Domestic unit sales price
$21
Unit manufacturing costs:
Variable
10
Fixed
4
The differential revenue from the acceptance of the offer is
a.$106,000
b.$339,200
c.$784,400
d.$445,200

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Stryker Industries received an offer from an exporter for 30,000 units of product at $17 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data is available:
Domestic unit sales price
$24
Unit manufacturing costs:
Variable
12
Fixed
4
What is the differential cost from the acceptance of the offer?
a.$510,000
b.$360,000
c.$720,000
d.$120,000

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Maize Company incurs a cost of $35 per unit, of which $20 is variable, to make a product that normally sells for $58. A foreign wholesaler offers to buy 6,000 units at $30 each. Maize will incur additional costs of $4 per unit to imprint a logo and to pay for shipping. Compute the increase or decrease in net income Maize will realize by accepting the special order, assuming Maize has suffi cient excess operating capacity. Should Maize Company accept the special order?

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Stryker Industries received an offer from an exporter for 24,000 units of product at $18 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data is available:
Domestic unit sales price
$21
Unit manufacturing costs:
Variable
11
Fixed
6
What is the amount of income or loss from acceptance of the offer?
a.$168,000
b.$264,000
c.$504,000
d.$432,000

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