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Assignment 10-3, Week 10 Problems




Assignment 10-3, Week 10 Problems;Acct 225, Managerial Accounting: Acct 225;Summer 2014, Managerial Accounting;Online 1;Assignment 10-3, Week 10 Problems;2.;Jamell Davis;instructions | help;value;15.00 points;Barker Company has a single product called a Zet. The company normally produces and sells 81,000 Zets;each year at a selling price of $44 per unit. The company?s unit costs at this level of activity are given;below;Direct materials;Direct labor;Variable manufacturing overhead;Fixed manufacturing overhead;Variable selling expenses;Fixed selling expenses;$ 6.50;9.00;3.80;6.00 ($486,000 total);3.70;6.50 ($526,500 total);Total cost per unit;$ 35.50;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 113,400 Zets each year without any;increase in fixed manufacturing overhead costs. The company could increase sales by 40% above the;present 81,000 units each year if it were willing to increase the fixed selling expenses by $100,000.;a. Calculate the incremental net operating income (Negative amount should be indicated with a;minus sign. Do not round intermediate calculations.);Incremental net operating income;$;b. Would the increased fixed selling expenses be justified?;Yes;No;2. Assume again that Barker Company has sufficient capacity to produce 113,400 Zets each year. The;company has an opportunity to sell 32,400 units in an overseas market. Import duties, foreign permits;and other special costs associated with the order would total $19,440. The only selling costs that would;be associated with the order would be $1.30 per unit shipping cost. Compute the per unit break-even;price on this order. (Do not round intermediate calculations. Round your answer to 2 decimal;places.);Break-even price per unit;$;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);of closing the plant;$;4. The company has 500 Zets on hand that were produced last month and have small blemishes. Due to;the blemishes, it will be impossible to sell these units at the normal price. If the company wishes to sell;them through regular distribution channels, what unit cost figure is relevant for setting a minimum selling;price? (Round your answer to 2 decimal places.);Relevant unit cost;$;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;;1/2;7/24/2014;Assignment 10-3, Week 10 Problems;intermediate calculations. Round your answer to 2 decimal places.);Total relevant unit cost;references;$;ebook & resources;?2014 McGraw -Hill Education. All rights reserv ed.;;2/2;Attachments;Assignment_10-3,_Week_10_Problems.pdf (134.36 KB)


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