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- Question 3Study the scenario and complete the questions that follow:Nonna Greco LimitedNonna Greco Limited manufactures and sells Italian HIP sunglasses. The following information relatesto January 2020:Units manufactured and sold: 500Income statement:RSales 261 500Less: Manufacturing costs 223 000Material 75 000Labour 50 000Manufacturing overheads (@ R20 per machine hour) 98 00038 500Less: Selling and administrative expenses (60% fixed) 17 500Net profit 21 000The following changes will come into effect on 1 February 2020: A sales price increase of 10%, resulting in a 5% decrease in sales volume. Due to negotiations with the labour union, the labour rate per hour will increase by 6%. It is expected that material costs will increase by 10%.The variable budget for manufacturing overheads indicates a total cost ofR94 400 at a capacity utilisation of 4 600 hours.Source: Hunde, T. (2020)Required:3.1 Calculate the total marginal income and marginal income per unit for the year ended 1…P2-3A Total Manufacturing Cost. Income Statement, Unit Cost, and Selling Price Two inventors, recently organized as Innovation, Inc., consult you regaridng and planned new product. They have estimates of the costs of materials, labor, overhead, and other expenses for 2019 but need to know how much to chanrge for each unit to earn a profit in 2019 equal to 15% of their estimated total long-term investment of $400,000 (ignore income taxes). Their plans indicate that each unit of the new product requires the following: Direct materials 4 lbs. of a materials costing $5/lb. Direct labor 2 hrs. of a meter former's time at $11/hr. 0.6 hr. of an assembler's time at $8/hr. Major items of production overhead would be annual rent of $46,460 for a factory building, $28,660 rent for machinery, and $21,700 of indirect materials. Other production overhead is estimated to be…Consider the info provided below as well as the financial statement and answer the questions that follows Pearson & Litt is a manufacturing company in the Eastern Cape. Their factory manufactures glass wine bottles for the Blue Valley Beer Co. 2019 2020 Sales price per unit R15 R19 Variable cost per unit R6 R7 Fixed cost (FC) per annum R650 000 R 855 500 Fixed cost per unit R 3 R 4 Current assets R 450 600 R 560 700 Current liabilities R 510 000 R 780 000 Retained profit R 21 809 R 17 600 Net Sales R 2 900 320…
- Consider the info provided below as well as the financial statements and answer the questions that follow.Pearson & Litt is a manufacturing company in the Eastern Cape. Their factory manufactures glass wine bottles for the Blue Valley Beer Co. For 2019 and 2020 respectively :Sales price per unit R15 and R19Variable cost per unit R6 and R7Fixed cost (FC) per annum R650 000 and R 855 500Fixed cost per unit R3 and R4Current assets R450 600 and R560 700Current liabilities R510 000 and R780 000Retained profit R21 809 and R17 600Net Sales R2 900 320 and R 3 100 100Cost of sales R390 000 and R475 000 The gross profit margin indicates how profitable sales have been.Q.1 Calculate the gross profit margin for Pearson & Litt for 2020. Q.2 Explain the results of the gross profit margin calculation.Consider the info provided below as well as the financial statements and answer the questions that follow.Pearson & Litt is a manufacturing company in the Eastern Cape. Their factory manufactures glass wine bottles for the Blue Valley Beer Co. For 2019 and 2020 respectively :Sales price per unit R15 and R19Variable cost per unit R6 and R7Fixed cost (FC) per annum R650 000 and R 855 500Fixed cost per unit R3 and R4Current assets R450 600 and R560 700Current liabilities R510 000 and R780 000Retained profit R21 809 and R17 600Net Sales R2 900 320 and R 3 100 100Cost of sales R390 000 and R475 000 The current ratio reflects the relationship between the value of the current assets and the extent of the current liabilities of a business.Q.1 Calculate the current ratio for Pearson & Litt for 2019. Q.2 Explain the results of the current‐test ratio.HINT: Include the minimum ratio recommended for the ratio in youranswer.iii) Determine the cost of direct material and salesman salary if the company produces *XX,XXX (80,000-90,000) bottles of drink. (CLO3, C3) iv) If production unit is *XXXXX (90,000 – 110,000): (CLO3, C3) a) Calculate total product cost b) Calculate total period cost v) Form cost function for: (CLO3, C3) a) Product cost b) Period cost
- 2. Applehead Technology is a company that purchases a device called the EyePod from a supplier and then sells the devices to retail customers. Applehead ships to its customers FOB shipping point. Applehead is seeking to increase its operating profit as much as possible. If it makes no changes in its operations, the company expects the following for the coming year. # of units sold 30,000 Price $300 per unit Shipping costs $ 3 per unit Cost of merchandise $160 per unit Rent of facilities and equipment $ 1,000,000 Managerial and administrative salaries $ 1,500,000 Knowing that the company wishes to increase its operating profit, Maria Garcia, the marketing manager, says “I think we…Case 2:Muscat Tubes Manufacturing LLC are the manufacturer of picture tubes for T.V. The following are the details of their operation during 2019. Rate of consumption per week is 200 units for Muscat Tubes Manufacturing LLC. Company estimated inventory carrying cost at 20% per annum. The ordering cost per order is RO 100. The cost incurred for purchasing a tube is RO 500. The rate of consumption per week is 100 to 300 units and lead time to supply is 6 to 8 weeks. During emergency purchase the lead time is 2 weeks.Calculate the following: a. Reorder levelb. Maximum level of stockc. Minimum level of stockd. Average level of stocke. Danger LevelQ1 Bauss Company, a manufacturer of bicycles, started its production in December 2019. For the preceding 5 years Boss Co. had been a retailer of bicycles. After a thorough survey of bicycles markets, management of the Bauss Co. decided to turn its retail store into a bicycles manufacturing factory. Cost of steel frame for a bicycles will total to $80 per unit. The cost of tires for every bicycle would be $25. Workers on the production lines are on average paid $35 per hour. A bicycle usually takes 8 hours to complete. In addition, the rent on the equipment used to assemble bicycle amounts to $6,000 per month. Indirect materials cost $7 per bicycle. A supervisor was hired to oversee production; her monthly salary is $3,500. Factory cleaning costs are $1,500 monthly. Utility costs amounts to $250 per month. Advertising costs to sell bicycles will be 10,500 per year. The factory building depreciation expense is $2,400 per month. Property taxes on the factory building will be $9,900 per…
- From the information provided below, find the following solutions: 1. An Income Statement2. What is the unit cost of Woods corporation if they produced 20,000 pieces of furniture were produced?3. How does the format of the income statement for a manufacturing concern differ from the income statement of a merchandising business? Advertising expense $ 85,000Amortization expense Patents -$16,000Special Design Cost -$10,000Bad Debts expense -$28,000Depreciation expense – Office equipment -$37,000Depreciation expense – Factory Building -$133,000Depreciation expense – Factory equipment -$78,000Direct Labour -$250,000Factory insurance expired - $62,000Factory supervision - $74,000Factory supplies used - $21,000Factory Utilities -$115,000Finished goods inventory, Jan 1 2008 -$15,000Finished goods inventory, Dec 31 2008 -$12,500Work in process inventory, Jan 1 2008 - $8,000Work in process inventory, Dec 31 2008 -$9,000Indirect labour - $26,000Interest expense -$25,000Miscellaneous expense…Question 3 Assume that HASF furniture Inc., as described, currently purchases the chair cushions for its lawn set from an outside vendor for $30 per set. Modern Furniture’s chief operations officer wants an analysis of the comparative costs of manufacturing these cushions to determine whether bringing the manufacturing in-house would save the firm money. Additional information shows that if Modern furniture’s were to manufacture the cushions, the materials cost would be $16 and the labor cost would be $10 per set and that it would have to purchase cutting and sewing equipment, which would add $25,000 to annual fixed costs. NOTE: No need to enter comma between numbers Required Computation for 10,000 units What amount should have been inccrued if company produce 10,000 units What amount should have been inccrued if company purhcase 10,000 units from outside What amount company save if company make 10,000 cushionsThis question is based on t he following information: B Hon Company purchases thermostats and use them in heating units it manufactures. Annual requirement for the thermostat is 2,000 units. The cost per thermostat is P 20. The cost of placing a single order is P 50 while the cost of storage is 25% of the average inventory value. The suppler of the thermostat offers a discount of 2% if the company will order in lots of 500 units. 1. How much would be the total costs associated with the inventory if the company adopts the discounted ordering policy? . A. P 40,000 B. P 40,625 C. P 41,000 D. P 42,0002. How much is the net cash flow net of income taxes for the 3rd year?A. 17,268B. 22,000C. 22,994D. 30,618