Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Barker Company has a single product called a Zet. The company normally produces and sells 89,000 Zets each year at a selling price of $48 per unit. The company's unit costs at this level of activity are given below:
Direct materials
$
7.50
Direct labor
10.00
Variable manufacturing overhead
4.80
Fixed manufacturing overhead
8.00
($712,000 total)
Variable selling expenses
3.70
Fixed selling expenses
5.50
($489,500 total)
Total cost per unit
39.50
A number of questions relating to the production and sale of Zets are given below. Each question is independent.
Required:
1.
Assume that Barker Company has sufficient capacity to produce 124,600 Zets each year without any increase in fixed manufacturing overhead costs. The company could increase sales by 40% above the present 89,000 units each year if it were willing to increase the fixed selling expenses by $110,000.
a.
Calculate the incremental net operating income (Negative amount should be indicated with a minus sign. Do not round intermediate calculations.)
Incremental net operating income
b.
Would the increased fixed selling expenses be justified?
Yes
No
2.
Assume again that Barker Company has sufficient capacity to produce 124,600 Zets each year. The company has an opportunity to sell 35,600 units in an overseas market. Import duties, foreign permits, and other special costs associated with the order would total $28,480. The only selling costs that would be associated with the order would be $1.40 per unit shipping cost. Compute the per unit break-even price on this order. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Break-even price per unit
3.
One of the materials used in the production of Zets is obtained from a foreign supplier. Civil unrest in the supplier's country has caused a cutoff in material shipments that is expected to last for three months. Barker Company has enough material on hand to operate at 25% of normal levels for the three-month period. As an alternative, the company could close the plant down entirely for the three months. Closing the plant would reduce fixed manufacturing overhead costs by 30% during the three-month period and the fixed selling expenses would continue at two-thirds of their normal level. What would be the impact on profits of closing the plant for the three-month period? (Input the amount as a positive value. Round your intermediate calculations of units produced and sold to the nearest whole number. Do not round your other intermediate calculations. Round your final answer to nearest whole number.)
Net (Click to select)advantage disadvantage of closing the plant
4.
The company has 400 Zets on hand that were produced last month and have small blemishes. Due to the blemishes, it will be impossible to sell these units at the normal price. If the company wishes to sell them through regular distribution channels, what unit cost figure is relevant for setting a minimum selling price?(Round your answer to 2 decimal places.)
Relevant unit cost
5.
An outside manufacturer has offered to produce Zets and ship them directly to Barker's customers. If Barker Company accepts this offer, the facilities that it uses to produce Zets would be idle; however, fixed manufacturing overhead costs would continue at 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be reduced by 60%. Compute the unit cost that is relevant for comparison to the price quoted by the outside manufacturer.(Do not round intermediate calculations. Round your answer to 2 decimal places.)
Total relevant unit cost
What will be the Book value of asset if its Original cost is Rs. 50,000; Accumulated depreciation is Rs. 20,000; and Depreciation expense for the year is
The town of Brittainville has two Enterprise Funds- one forits water and wastewater operations. How will the interfund payment be reported on the CableEnterprise Fund's operating statement?
ABC Company has just received a special order for 1,000 deck chairs. ABC has sufficient idle capacity to accept the order. Indicate whether the given cost is a sunk cost, opportunity cost, relevant or not relevant to the decision to accept the spe..
Using the following data for Sentinel Travel Service as well as the retained earnings statement, prepare a balance sheet as of August 31, 2014.
The following transactions occurred in June at Fast Wheels, Inc., a custom bicycle manufacturer:
An account is an important accounting record where financial information is stored until needed. Briefly explain (1) the nature of an account, (2) the different types of accounts, and (3) the manner in which an account is increased and decreased a..
On January 1, Year 3, Starlight Construction Co. began a construction project qualifying for capitalization of interest. The total amount spent on this project during Year 3 was $250,000,
murphy company plans to produce 50000 units in march and 60000 units in april. each unit requires 6 pounds of direct
How does a customer benefit by our spending $50,000 on a supposedly better accounting system?" How should the controller respond?
an tax accountant is examining his productivity. in 1996 he did 300 tax returns in 1400 hours. in 1997 he did 250 tax
klumm company builds custom fishing lures for sporting goods stores. in its first year of operations 2011 the company
in december 2008 dreamvision established its predetermined overhead rate for movies produced during year 2009 by using
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd