Question;1. (10 pts)Jackson Inc. is a management consulting firm that specializes in management training programs. Max Manufacturing Inc. has approached Jackson to contract for management training for a one-year period. Last year's income statement for Jackson is as follows:To satisfy the Max contract, another part-time trainer will need to be hired at $44,000. Supplies will increase by 14% and other costs will increase by 16%. In addition, new equipment will need to be leased at a cost of $2,500.a. What are the differential costs that would be incurred if the Max contract is signed?b. If Max will pay $55,000 for one year, should Jackson accept the contract? Explain your answer.2. (10 pts) The management of Wenny Corporation is considering dropping product YE3. Data from the company's accounting system appear below:All building expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $42,000 of the building expenses and $48,000 of the selling and administrative expenses will not be incurred if product YE3 is discontinued.a. According to the company's accounting system, what are the operating profits earned by product YE3?b. What would be the impact on the company's overall operating profits if product YE3 is dropped? Should the product be dropped?3. (10 pts) Walters INC. produces electronic storage devices, and uses the following three-part classification for its manufacturing costs: materials, labor, and support costs. Total support costs for January were $300 million, and were allocated to each product on the basis of labor costs of each line. Summary data (in millions) for January for the most popular electronic storage device, the Big Sharon, was:a. Compute the manufacturing cost per unit for each product produced in January.b. Suppose production will be reduced to 30,000 units in February. Speculate as to whether the unit costs in February will most likely be higher or lower than unit costs in January, it is not necessary to calculate the exact February unit cost. Briefly explain your reasoning.4. (15 pts)The following cost and inventory data were taken from the records of the Jones Company for the year:Costs incurred:Required:(a) Compute the cost of goods manufactured.(b) Prepare a cost of goods sold statement.5. (15 pts) The Mussell Company provided you with the following information for the fiscal year ended December 31.Required:(a) Compute the total manufacturing costs incurred during the year.(b) Compute the total work-in-process during the year.(c) Compute the cost of goods manufactured during the year.(d) Compute the cost of goods sold during the year.(e) Compute the total prime costs for the year.(f) Compute the total conversion costs for the year.6. (10 pts)The Fox Corporation has budgeted fixed costs of $120,000 and an estimated selling price of $16.50 per unit. The contribution margin ratio is 40% and the company plans to sell 27,000 units in 2013.Required:(a) Compute the break-even point in dollars.(b) Compute the margin of safety for 2013.(c) Compute the expected operating profit for 2013.7. (10 pts) You have been provided with the following information regarding the Gore Company:This information is based on forecasted sales of 25,000 units.Required:(a) What are the expected operating profits for the upcoming year?(b) What is the break-even point in units?(c) What is the break-even point in dollars?(d) If $80,000 of operating profits is desired, how many units must be sold?(e) How much in sales dollars is required to generate operating profits of $75,000?8. (10 pts) Beavis Manufacturing is considering the introduction of a new music player with the following price and cost characteristics:Required:(a) How many units must T-Tunes sell to break even?(b) How many units must T-Tunes sell to make an operating profit of $120,000 for the year?(c) If projected sales are 7,500 units, what is the margin of safety in units?9. (10 pts) Manson Corporation produces and sells a single product. In January, the company sold 1,700 units. Its total sales were $153,000, its total variable costs were $79,900, and its total fixed costs were $56,800.Required:a. Construct the company's contribution format income statement for January in good form.b. Redo the company's contribution format income statement assuming that the company sells 1,600 units.
Paper#41609 | Written in 18-Jul-2015Price : $27