Qw.111. 12-30 Factors affecting investment decisions by managers and accept or reject decisionsLMTC Ltd manufactures PE clothes for primary schools in Northamptonshire, the UnitedKingdom. The company pro duces 30,000 units per academic session. The following is the costper unit: £ Direct materials 6 Direct labor 8 Variable overhead 12 Manufacturing overhead 24Total 50 It has been established that £16 of the overhead is fixed. Kids Jump Ltd has offered tosell 30,000 units of the PE clothes to LMTC Ltd for £46 per unit. If LMTC Ltd accepts the offer,some of the facilities presently used to manufacture the PE clothes could be leased to a thirdparty and would generate a revenue of £65,000 per academic session. Additionally, one-fourthof the fixed overhead cost incurred in PE clothes production would be totally eliminated.a. Should LMTC Ltd accept or reject the offer from Kids Jump Ltd?b. What other factors do managers consider in accepting or rejecting of investmentdecisions

Investment decisions involve the process of choosing how to allocate money or resources in order to…

of the fixed overhead cost incurred in PE a. Should LMTC Ltd accept or reject the offer from Kids Jump Ltd? b. What other factors do managers consider in accepting or rejecting of investment decisions

of the fixed overhead cost incurred in PE a. Should LMTC Ltd accept or reject the offer from Kids Jump Ltd? b. What other factors do managers consider in accepting or rejecting of investment decisions

Managerial Accounting

15th Edition

ISBN:9781337912020

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

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

Chapter13: Lean Manufacturing And Activity Analysis

Section: Chapter Questions

Problem 13E: Lean accounting Modern Lighting Inc. manufactures lighting fixtures, using lean manufacturing...

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Management Decision Making Sydney Industries Limited manufactures portable record players at a unit cost of: Direct Labour $30 Direct Materials $40 Variable Factory Overhead $24 Fixed Factory Overhead $36 The company sells each record player for $160 and is presently operating at 75% of its capacity of 50,000 units per year. The company has received a special order at a price of $106 per unit from a mail order firm for 1,000 units per month for one year only. The units sold to the mail order firm would be identical to the company’s regular record players except for a special nameplate. Sydney Industries would have to buy a new machine for $35,000 to produce the special nameplate. The machine will have no alternative use or residual value at the end of the year. The sales by the mail order firm would not affect the company’s regular sales because of the different label and different markets involved. Required: Show workings. (a) Determine whether or not the…
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