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Five Accounting questions

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Question;1 (TCO D) Data for December;concerning Dinnocenzo Corporation's two major business segments-Fibers and;Feedstocks-appear below;Sales;revenues, Fibers;$870,000;Sales;revenues, Feedstocks;$820,000;Variable;expenses, Fibers;$426,000;Variable;expenses, Feedstocks;$344,000;Traceable;fixed expenses, Fibers;$148,000;Traceable;fixed expenses, Feedstocks;S156,000;Common;fixed expenses totaled $314,000 and were allocated as follows: $129,000 to the;Fibers business segment and $185,000 to the Feedstocks business segment.;Required;Prepare a segmented income statement in the contribution format for the;company. Omit percentages, show only dollar amounts.;2.(TCO D) Eber Wares is a division of a major corporation. The;following data are for the latest year of operations.;Sales;$30,000,000;Net Operating income;$1,170,000;Average operating assets;$8,000,000;The company's minimum required;rate of return;18%;Required;i. What is the division's margin?;ii. What is the division's turnover?;iii. What is the division's ROI?;iv. What is the division's residual income? (Points: 15);3.(TCOD) The management of Thews Corporation is considering;dropping product E28I. Data from the company's accounting system appear below.;Sales;$480,000;Variable Expenses;$202,000;Fixed Manufacturing Expenses;$158,000;Fixed Selling and Administrative;Expenses;$130,000;All fixed expenses of the company are fully allocated to products in the;company's accounting system. Further investigation has revealed that $86,000 of;the fixed manufacturing expenses and $67,000 of the fixed selling and;administrative expenses are avoidable if product E28I is discontinued.;4.(TCO D) Fouch Company makes 30,000 units per year of a part;it uses in the products it manufactures. The unit product cost of this part is;computed as follows.;Direct Materials;$15.70;Direct Labor;$17.50;Variable Manufacturing Overhead;$4.50;Fixed Manufacturing Overhead;$14.60;Unit Product Cost;$52.30;An outside supplier has offered to sell the company all of these parts it needs;for $51.90 a unit. If the company accepts this offer, the facilities now being;used to make the part could be used to make more units of a product that is in;high demand. The additional contribution margin on this other product would be;$219,000 per year.;If the part were purchased from the outside supplier, all of the direct labor;cost of the part would be avoided. However, $6.20 of the fixed manufacturing;overhead cost being applied to the part would continue even if the part were;purchased from the outside supplier. This fixed manufacturing overhead cost;would be applied to the company's remaining products.;Required;i. How much of the unit product cost of $52.30 is relevant in the decision of;whether to make or buy the part?;ii. What is the net total dollar advantage (disadvantage) of purchasing the;part rather than making it?;iii. What is the maximum amount the company should be willing to pay an outside;supplier per unit for the part if the supplier commits to supplying all 30,000;units required each year? (Points: 15);Required;i. What is the net operating income earned by product E28I according to the;company's accounting system? Show your work!;ii. What would be the effect on the company's overall net operating income of;dropping product E28I? Should the product be dropped? Show your work! (Points: 15);Question 5. 5.(TCO D) A customer has asked;Clougherty Corporation to supply 4,000 units of product M97, with some;modifications, for $40.10 each. The normal selling price of this product is;$48.00 each. The normal unit product cost of product M97 is computed as;follows.;Direct;Materials;$18.50;Direct;Labor;$1.20;Variable;manufacturing overhead;$8.40;Fixed;manufacturing overhead;$3.90;Unit;product cost;$32.00;Direct labor is a variable cost. The special order would have no effect on;the company's total fixed manufacturing overhead costs. The customer would;like some modifications made to product M97 that would increase the variable;costs by $5.70 per unit and that would require a one-time investment of;$31,000 in special molds that would have no salvage value. This special order;would have no effect on the company's other sales. The company has ample;spare capacity for producing the special order.;Required;Determine the effect on the company's total net operating income of accepting;the special order. Show your work!;(Points: 15)

 

Paper#37548 | Written in 18-Jul-2015

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