Reference no: EM132702745
Speedy Sports manufactures footballs and has the capacity to produce 80,000 balls per year. Budgeted information for the current year is as follows:
Expected sales (80,000 units) $ 400,000
Direct Materials $ 100,000
Direct Labour $ 80,000
Manufacturing overhead $ 120,000
- They have been approached by a major football team, PSB United, with a request for a special order of 10,000 balls. Because of the large order being placed, PSB are only willing to pay $4 per ball for the special order.
- PSB United requires the balls to be stamped with their team logo which will require the purchase of a special machine for $10,000. After Speedy Sports completes the special order they will have no further use for the machine.
- In addition, the logo will require a special coloured dye which will add $0.25 to the materials cost per ball.
- The budgeted manufacturing overhead is based, in part, on budgeted annual fixed manufacturing overhead of $100,000.
- In the middle of the year, prior to PSB requesting the special order, management had estimated that annual sales would amount to only 70,000 units.
Required:
Question 1. Jill, the trainee accountant at Speedy Sports, was asked to do a preliminary analysis and recommends rejecting the special order because it would result in a financial loss. Do you agree with Jill?
Question 2. Explain how Jill may have arrived at her conclusion that the special order would result in a financial loss. Also explain the error in Jill's approach that you have just outlined.
Question 3. Refer to part (1). Identify and elaborate on three qualitative factors, specific to the case facts, which you would recommend be considered by Speedy Sports.
Question 4. Now assume that when management did their mid-year analysis, Speedy Sports was on track to reach their expected sales, what would you recommend the firm do with regard to the special order? You must show relevant calculations, AND explain the logic underpinning your calculations.
What might constitute criteria for non-participation
: Power relating to social status is premised on a willingness to "participate"; what might constitute criteria for non-participation, and should we think
|
Discussion about the elements of malpractice
: There is a need to understand that malpractice is one of the legal issues that face nurse practitioners. Therefore, it is essential to understand the elements.
|
What were the inventories as at december
: What were the Inventories as at 31/12/19? The following data relates to Tan Jiang Motors for the year ended 31/12/19. Cash at Bank $10,000
|
Evaluate the accountant proposed control system
: Critically evaluate the strengths and weaknesses of using Profit and Loss statements based on absorption costing to evaluate departmental performance.
|
Explain error in jill approach that have just outlined
: how Jill may have arrived at her conclusion that the special order would result in a financial loss. Also explain error in Jill's approach that just outlined
|
How can barriers to process improvement
: How can barriers to process improvement, such as staff reluctance to change, lack of capital, technological barriers, or clinical practice guidelines, be overco
|
Define any meds and diagnosis that you talk about
: Define any meds and diagnosis that you talk about, remember to cite. How does this experience affect your path through nursing school?
|
How would the tax incentives given by government
: How would the tax incentives, tax reliefs, or tax adjustments given by government can help the industry for their short or long-term stability during crisis
|
Denote how project managers manage the change
: Denote how project managers manage the change on the project (to include the tools required to manage) and why it's important to ensure change is approved.
|