Production Sales Selling price per toy Cost per toy: Material Direct labour Variable production overhead Fixed production overhead Quarter Ending Quarter Ending September 30,2003 13,000 12,000 $70 $14.00 9.00 3.00 10.00 December 31,2003 15,000 16,000
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- Please answer questions 4a-4d only. Neptune Company has developed a small inflatable toy that it is anxious to introduce to its customers. The company’s Marketing Department estimates that demand for the new toy will range between 20,000 units and 35,000 units per month. The new toy will sell for $9.00 per unit. Enough capacity exists in the company’s plant to produce 25,000 units of the toy each month. Variable expenses to manufacture and sell one unit would be $5.00 , and incremental fixed expenses associated with the toy would total $30,000 per month. Neptune has also identified an outside supplier who could produce the toy for a price of $4.00 per unit plus a fixed fee of $71,000 per month for any production volume up to 25,000 units. For a production volume between 25,001 and 55,000 units the fixed fee would increase to a total of $142,000 per month. Required: 1. Calculate the break-even point in unit sales assuming that Neptune does not hire the outside supplier. 2. How much…Choose the correct letter of answer Patience company is considering a proposal to replace an existing machine used for the manufacture of Product A. The new machine is expected to increase annual fixed costs by P120,000; however, variable costs should decrease by 20% because of a reduction in direct labor hours and more efficient usage of direct materials. Before this change was under consideration, Patience had budgeted Product A sales and cost for 2021 as follows: (1) Sales, P2,000,000; (b) variable costs, 70% of sales; and (c) fixed costs, P400,000.o Assuming that Patience implemented the above proposal by January 1, 2021, what would be the increase in budgeted operating profit for Product A for 2021? a. P160,000b. 20%c. 47% d. none of the aboveQ4 The Portland Company manufactures Part No. 498 for use in its production line. The manufacturing cost per unit for 20,000 units of Part No. 498 is as follows: Direct materials $4 Variable direct manufacturing labor 22 Variable manufacturing overhead 17 Fixed manufacturing overhead allocated 20 Total manufacturing cost per unit $63 The Counter Company has offered to sell 20,000 units of Part No. 498 to Portland for $58 per unit. Portland will make the decision to buy the part from Counter if there is an overall savings of at least $20,000 for Portland. If Portland accepts Counter’s offer, $5 per unit of the fixed manufacturing overhead allocated would be eliminated. Furthermore, Portland has determined that the released facilities could be used to save relevant costs in the manufacture of Part No. 575. For Portland to…
- 2. Alliss Limited manufactures de-luxe juicing machines. Each machine has a wholesale price of £225. Variable costs of manufacture are £56 per machine. Because of increased competition, the sales director has reduced the level of sales that the company can realistically expect to make. The actual sales level in 2020 was 3561 machines, but the budget for 2021 is only 3250 machines. Fixed costs for the year 2020 are budgeted at £560 000. Advise the company's directors on whether they should increase the selling price.Yummy bakes (Pty) Ltd is a company that bakes cakes. The company budgeted to bake 1 500 cakes and budgeted fixed manufacturing overheads (FMO) were R112 500 in the year 2022. Actual results revealed that the company produced 1 300 cakes and incurred R95 000 of fixed manufacturing overheads. What is the predetermined FMO recovery rate per unit? a. R75 per unit b. R73 per unit c. R63 per unit d. R86 per unit Please don't provide answer in image format thank youQ2. A&D Ltd. is in the manufacturing of wooden products and makes several wooden items. The following values are related to a particular wooden item: Particulars Selling price per unit SAR 1,100 Variable cost per unit SAR 400 Total fixed costs SAR 500,000 Estimated next year’s budgeted sales 1,200 units You are required to calculate: BEP in units and BEP in sales SAR Degree of operating leverage Margin of safety in units Margin of safety in SAR
- Q7. c) Contribution statement for komfwe dry cleaning Ltd Product A(ZMW) Product B(ZMW) Unit budgeted 1000 1000 Sales 1000 500 Variable costs 600 300 Contribution 400 200 Fixed costs 200 200 Profit 100 - Calculate i) Break-even point for each product ii) Contribution ratio for each product iii) Can you close product B and why? ExplainQ3. Martinez limited is a manufacturing company based in Martinez district, Lusaka province. It manufactures a product called “JUNTA SPARK”. Below is the data relating to JUNTA SPARK: Per Unit (K) Selling price Direct materials Direct Labour cost Variable overhead Fixed overhead cost The total fixed cost per period was K60 million. The company has budgeted to sell 12,000 units of JUNTA SPARK for the period. Required: (i) (ii) (iii) (iv) (v) 2,000 Calculate the Break Even Point (B.E.P) in units and in sales value Calculate the Margin of safety (MOS) in units and percentage Calculate the number of units to be produced if the company is targeting a profit of K1.2 million The Break Even Point in units if the selling price dropped by 5% but other variables remained constant State four major limitations of Cost Volume Profit (CVP) AnalysisLean principles Bright Night, Inc., manufactures light bulbs. Its purchasing policy requires that the purchasing agents place each quarters purchasing requirements out for bid. This is because the Purchasing Department is evaluated solely by its ability to get the lowest purchase prices. The lowest bidder receives the order for the next quarter (90 working days). To make its bulb products, Bright Night requires 36,000 pounds of glass per quarter. Bright Night received two glass bids for the third quarter, as follows: Central Glass Company: 30.00 per pound of glass. Delivery schedule: 36,000 (400 lbs. x 90 days) pounds at the beginning of July to last for 3 months. Ithaca Glass Company: 30.20 per pound of glass. Delivery schedule: 400 pounds per working day (90 days in the quarter). Bright Night accepted Central Glass Companys bid because it was the low-cost bid. Instructions 1. Comment on Bright Nights purchasing policy. 2. What are the additional (hidden) costs, beyond price, of Central Glass Companys bid? Why werent these costs considered? 3. Considering only inventory financing costs, what is the additional cost per pound of Central Glass Companys bid if the annual cost of money is 8%? (Hint: Determine the average value of glass inventory held for the quarter and multiply by the quarterly interest charge, then divide by the number of pounds.)
- Refer to Cornerstone Exercise 8.1, through Requirement 1. FlashKick requires ending inventory of product to equal 20 percent of the next months unit sales. Beginning inventory in January was 3,100 practice soccer balls and 400 match soccer balls. Required: 1. Construct a production budget for each of the two product lines for FlashKick Company for the first three months of the coming year. 2. What if FlashKick wanted a production budget for the two product lines for the month of April? What additional information would you need to prepare this budget? FlashKick Company manufactures and sells soccer balls for teams of children in elementary and high school. FlashKicks best-selling lines are the practice ball line (durable soccer balls for training and practice) and the match ball line (high-performance soccer balls used in games). In the first four months of next year, FlashKick expects to sell the following: Required: 1. Construct a sales budget for FlashKick for the first three months of the coming year. Show total sales for each product line by month and in total for the first quarter. 2. What if FlashKick added a third linetournament quality soccer balls that were expected to take 40 percent of the units sold of the match balls and would have a selling price of 45 each in January and February, and 48 each in March? Prepare a sales budget for Flash- Kick for the first three months of the coming year. Show total sales for each product line by month and in total for the first quarter.Refer to Cornerstone Exercise 8.6. Required: 1. Calculate the total budgeted cost of units produced for Play-Disc for the coming year. Show the cost of direct materials, direct labor, and overhead. 2. Prepare a cost of goods sold budget for Play-Disc for the year. 3. What if the beginning inventory of finished goods was 75,200 (for 16,000 units)? How would that affect the cost of goods sold budget? (Assume Play-Disc uses the FIFO method.) Play-Disc makes Frisbee-type plastic discs. Each 12-inch diameter plastic disc has the following manufacturing costs: For the coming year, Play-Disc expects to make 300,000 plastic discs, and to sell 285,000 of them. Budgeted beginning inventory in units is 16,000 with unit cost of 4.75. (There are no beginning or ending inventories of work in process.) Required: 1. Prepare an ending finished goods inventory budget for Play-Disc for the coming year. 2. What if sales increased to 290,000 discs? How would that affect the ending finished goods inventory budget? Calculate the value of budgeted ending finished goods inventory.Problem 2 LeDuc Inc. produces a line of products which includes men’s wallets. During 2011, there are 4,000 wallets budgeted for production with a total material cost for the wallets of $18,860 and direct labor totaling $10,250. Manufacturing overhead costs are budgeted at $2.80 per wallet of which $1.22 is variable. Unavoidable fixed overhead is 30% of total fixed overhead. Good Supply has offered to sell the wallets to LeDuc for $9.00 each. Required A. Use incremental analysis to determine if the company should outsource. B. What qualitative factors should the company consider in making the decision?