Each of the following situations is independent. A. Vallis Inc. manufactures machine parts for military an offer from another military subcontractor to provide 2.000 units of product ZR17 for $120,000. If Vallis does not purchase these parts ft continue to produce them in-house at the following drones. The company is considering om the subcontractor, it must bosts: Cost per Unit $28 $18 $16 $4 Direct materials Direct labour Variable overhead Allocated fixed overhead Required: a. Analyze the offer quantitatively to determine if Vallis should continue to manufacture the component or outsource it. b. Outline at least three qualitative considerations that Vallis should consider in this decision. Why are these factors that you have outlined important?
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- Zena Technology sells arc computer printers for $55 per unit. Unit product costs are: A special order to purchase 15,000 arc printers has recently been received from another company and Zena has idle capacity to fill the order. Zena will incur an additional $2 per printer for additional labor costs due to a slight modification the buyer wants made to the original product. One-third of the manufacturing overhead costs is fixed and will be incurred no matter how many units are produced. When negotiating the price, what is the minimum selling price that Zena should accept for this special order?A manufacturer produces a car component. The cost sheet of the component is asfollows:Direct Material 4.00Direct Labour 2.00Variable Overheads 1.50Fixed Overheads 2.50A foreign manufacturer who uses this car component offers to purchase 20,000 units at Rs. 13 per component against the usual price of Rs. 15 per unit. If this offer is accepted the fixed expenses will go up by Rs. 40,000 annually.Would you accept this offer? Are there any other considerations, which may affect your decision?Provide a better solution On January 1, 2021, VVV received from ABC 300 pieces of bread toaster. VV was to sell these on consignment at 50% above original cost, for a 15% commission on the selling price. After selling 200 pieces, VVV had the remaining unsold units repaired for some electrical defects which he spent P2,000. ABC subsequently increased the selling price of the remaining units to P330 per unit. On January 31,2021, VVV remitted P64,980 to ABC after deducting the 15% commission, P850 for delivery expenses of sold units, and P2,000 for the repair of 100 units. The consignment goods cost ABC P200 per unit, and P900 had been paid to ship them to VVV shop. All expenses in connection with the consignment were reimbursable to the consignee. Determine the value inventory to be presented in the statement of financial position.
- 3. Company O has a new product that has the following cost per unit: direct materials - $10, direct labor - $7, and overhead - $3. If the sales manager wants to achieve a gross margin of 25% of cost for the particular product. What would be the selling price per unit?4. Company H acquired an equipment on June 1, 2020 amounting to $35,000 with an estimated useful life of 5 years. What would be the reported carrying value of the equipment on December 31, 2021 if the residual value at the end of 5 years is $5,000?5. On March 1, 2019, Company B issued $1,000,000, 10 years, 12% bonds at 103 excluding accrued interest. The bonds are dated January 1, 2019 and will mature on January 1, 2029. The interest is payable semi-annually on January 1 and July 1 of each year. Company B paid transaction costs amounting to $50,000. How much would be the net cash receipts of Company B as a result of the bond issuance?Use this information for Stryker Industries to answer the question that follow. Stryker Industries received an offer from an exporter for 22,000 units of product at $17 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: Domestic unit sales price $25 Unit manufacturing costs: Variable 11 Fixed 6 What is the amount of income or loss from the acceptance of the offer? a. $374,000 income b. $550,000 loss c. $242,000 loss d. $132,000 incomeBella Pool Company sells prefabricated pools that cost P100,000 to customers for P180,000. The sales price includes an installation fee, which is valued at P25,000. The fair value of the pool is P160,000. The installation is considered a separate performance obligation and is expected to take 3months to complete. The transaction price is allocated to the pool and the installation is:a. P155,676 and P24,324 respectivelyb. P160,000 and P25,000 respectively Show complete solution
- For the next 2 items. Markgil Corp. manufactures a product that yields the by-product "Yum". The only costs associated with Yum are selling costs of P.10 for each unit sold. Abel accounts for sales of Yum by deducting Yum's separable costs from Yum's sales, and then deducting this net amount from the major product's cost of goods sold. Yum's sales were 100,000 units at P1.00 each. If Markgil changes its method of accounting for Yum's sales by showing the net amount as additional sales revenue, then Markgil's gross margin would * a. Increase by P90,000 b. Decrease by P90,000 c. Increase by P100,000 d. Increase by P100,000 e. Be unaffected If Markgil changes its method of accounting for Yum's sales by showing the net amount as other income, then Markgil's gross margin would * a. Increase by P90,000 b. Decrease by P90,000 c. Increase by P100,000 d. Increase by P110,000 e. Be unaffectedProblem #2 Lebanon Metal Company (LMC), a manufacturer of various metal parts, must decide whether to enter the competition to become the supplier of transmission housings for Gulf Electric, a company that produces the housings in its own in-house manufacturing To compete, LMC must purchase a new forge that will cost $150,000. If LMC gets the order, it may be able to sell as many as 3,000 units per year to Gulf Electric for $60 each, and costs will be $15 per unit. The firm expects that the project will have about five-year product life. The firm also estimates that the amount ordered by Gulf Electric in the first year will be ordered in each of the subsequent four years . The initial investment can be depreciated on a MACRS-GDS basis over a 5year period, the tax-rate is expected to remain 40%. At the end of five years, the forge is expected to retain a market value of $50,000 at the end of year 5. LMC's before tax MARR is 15% per year. Problem #2 Part A: Create a spreadsheet to…Steel drums manufacturer incurs a yearly operating cost of P 200,000. Each drum manufactured cost P 160 and sells for P 300. A machine use for the production has a first cost of P 20,000 and a salvage value of P 2,000 after producing 1,000 units. What is the break even number of units per year? Choices: a. 1,452 b. 1,510c. 1,386d. 1,640 Show solution. Do not use excel. Ans: d
- Please provide a complete solution and with explanation for better understanding. Thank you. ABC Consigned 15 construction machines to XYZ Co. The machines cost P450,000 each. Freight on the shipment which was paid by ABC amounted to P300,000. XYZ Co. submitted an account sale stating that they had sold 6 units and remitted P3,412,500 balance due to ABC after the following deductions: Commission 20% of selling price; Marketing expenses P325,000; Delivery of items sold 250,000; Delivery cost paid upon receipt of consignment 137,500. Compute for the selling price per unit.Camilla Company manufactures mobile phones. Mark Company has approached Camilla with a proposal to sell the company mobile phones at a total selling price of P125,000 for 100,000 units. Camilla has the following cost associated the production of 100,000 mobile phones: Direct materials P 46,500 Direct labor 43,500 Manufacturing overhead 60,000 Total P150,000 Manufacturing overhead includes P24,000 of costs that will be eliminated if the mobile phones are no longer produced by Camilla . What is the incremental cost or savings if the mobile phones are bought instead of made?ACCEPT or REJECT (SPECIAL ORDER DECISION) XYZ Company produces and sells toy cars. Each toy car sells for P50 and the company sells approximately 500,000 toy cars each year. Unit cost data for 2022 are given below: Fixed Variable Direct Material - P15 Direct Labor - P12 Factory Overhead P8 P5 Overhead Costs P2 P3 XYZ has received an offer from a foreign customer to purchase 15,000 toy cars at P40. Domestic sales will not be affected by this transaction. If the offer is accepted, the company has idle capacity to accommodate the order but the unit variable distribution costs will increase by P2 for insurance andimport duties. REQUIREMENTS: 1. What is the relevant unit cost of the special order? 2. Should Brenda accept or reject the special order? SHOW SOLUTIONS ON EACH REQUIREMENT