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Question;i want to buy two questions answers. i donot know how to do that. I.;Segmented Income Statement (Partial) ? Chapter;12 (13 points);Fog City Retail operates a retail store in;Phoenix, Las Vegas, and Portland. The;following;information relates to the Phoenix facility;?;The store sold 65,000 units at;$18.00 each, after having purchased the units from various suppliers for;$12.50. Phoenix salespeople are paid a;5% commission based on gross sales dollars.;?;Phoenix?s sales manager oversees the;placement of local advertising contracts, which totaled $54,000 for the;year. Local property taxes amounted to;$14,500.;?;The sales manager?s $65,000 salary;is set by Phoenix?s store manager. In;contrast, the store manager?s $134,000 salary is determined by Fog City?s vice;president.;?;Phoenix incurred $6,800 of other;noncontrollable costs along with $10,000 of income tax expense.;?;Nontraceable (common) corporate;overhead totaled $68,000.;Fog;City?s corporate headquarters is located in Portland, and the company uses responsibility;accounting to evaluate performance.;Required;Prepare;a segmented income statement for the Phoenix store, being sure to disclose the;segment contribution margin, the segment profit margin, and net income.;II.;Special Order, Outsourcing - Chapter;14 (12 points);Cornell Corporation manufactures;faucets. Several weeks ago, the firm;received a special-order inquiry from Yale, Inc. Yale desires to market a faucet similar to;Cornell's model no. 55 and has offered to purchase 3,000 units. The following data are available;? Cost data for;Cornell's model no. 55 faucet: direct materials, $45, direct labor, $30 (2;hours at $15 per hour), and manufacturing overhead, $70 (2 hours at $35 per;hour).;? The normal selling;price of model no. 55 is $180, however, Yale has offered Cornell only $115;because of the large quantity it is willing to purchase.;? Yale requires a;design modification that will allow a $4 reduction in direct-material cost.;? Cornell's;production supervisor notes that the company will incur $8,700 in additional;set-up costs and will have to purchase a $3,300 special device to manufacture;these units. The device will be;discarded once the special order is completed.;? Total;manufacturing overhead costs are applied to production at the rate of $35 per;labor hour. This figure is based, in;part, on budgeted yearly fixed overhead of $624,000 and planned production;activity of 24,000 labor hours.;? Cornell will;allocate $5,000 of existing fixed administrative costs to the order as;?part of the cost of doing business.;Required;A.;One of Cornell's staff accountants wants to reject the special;order because "financially, it's a loser." Do you agree with this conclusion if Cornell;currently has excess capacity? Show;calculations to support your answer.;B.;If Cornell currently has no excess capacity, should the order be;rejected from a financial perspective?;Briefly explain.;C.;Assume that Cornell currently has no excess capacity. Would outsourcing be an option that Cornell;could consider if management truly wanted to do business with Yale? Briefly discuss, citing several key;considerations for Cornell in your answer.


Paper#38888 | Written in 18-Jul-2015

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