2.Pridya Enterprise is a small manufacturing enterprise that producesornaments for holiday decoration. One of the top sales ornaments is 'RedStar'. Production of each unit of the ornament requires the followingresources:Material C2 units @ RM8 per unitRM3.00 per unit3 hours @ RM11 per hourPackagingSkilled LabourThe yearly annual factory rental is RM52,800. The monthly budgetedsales unit of Red Star is 2,400 units at RM68 per unit.Required to compute:(a)Contribution margin per unit.(b)Break-even point in units and value.(c)Determine the margin of safety in units and value.(d) The management is considering to acquire a new machine to havedifferent varieties of Red Star sizes. The machine will costRM12,000. Determine how many extra units to be sold to obtainthe same profit with current forecasted sales unit.

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Answered: 2. Pridya Enterprise is a small…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Careless Company manufactures and sells sunglasses. Price and cost data are as follows: Selling price per pair of sunglasses P25.00 Variable costs per pair of sunglasses: Raw materials P11.00 Direct labor P5.00 Manufacturing overhead P2.50 Variable Selling expenses P1.30 Annual fixed costs: Manufacturing overhead P192,000 Selling and administrative P276,000 Careless Company estimates that its direct labor costs will increase 8 percent next year. How many units will Careless Company have to sell next year to reach breakeven?
A small company produces two products, x and y. Product x requires 1 hour of labour and 6 tons of raw materials, whereas each unit of product y requires2 hours of labour and 5 tons of raw material. The number of hours available each week is 40 and the available raw materials each week is 150 tons. If the contribution to profit is £2 per unit of product x and £3 per unit of y, determine the weekly production mix that will maximize profits.
Deluxe Homes is a residential Home Builder. Based on their current production of 300 homes per year, they currently make a profit of $20,000 per unit, based on the following costs per unit: Direct labor $ 20,000 Direct materials 200,000 Variable overhead 30,000 Fixed overhead 40,000 Variable selling costs 10,000 Fixed selling costs 10,000 Total costs per unit $310,000 Required Each of these are separate situations: A. Prepare an income statement based on the information provided. B. What is the profit and cost per unit if production is increased to 400 homes per year, and there is an increase of $1.50 million in total fixed overhead costs?
Rooney Electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly cost of producing 9,100 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs* $ 5,200 6,500 3,600 9,300 26,600 Allocated facility-level costs *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Rooney for $2.70 each. Required a. Calculate the total relevant cost. Should Rooney continue to make the containers? b. Rooney could lease the space it currently uses in the manufacturing process. If leasing would produce $11,500 per month, calculate the total avoidable costs. Should Rooney continue to make the containers? a. Total relevant cost Should Rooney continue to make the containers? b. Total avoidable cost Should Rooney continue to make the containers?
23.AA Mouse, Inc. makes a special mouse for computers. Each mouse sells for Php 25 and annual production and sales are as 120,000 units. Cost of each mouse are as follows: Direct Material Php6.00, Direct Labor 3.00, Variable Overhead 0.80, Variable Selling expenses Php 2.2, and Total Fixed Overhead Cost Php 589,550.00. Calculate the unit contribution margin in pesos. 24.Based on the facts of AA Mouse, Inc. What is the contribution margin ratio for the product? 25.Based on the facts of AA Mouse, Inc. How many mice must the company sell if it desires to earn Php 996,450 in before-tax profits?
An organization makes and sells three products, F, G, and H. The products are sold in the proportions F: G:H= 2:1:3. The organization’s fixed costs are $80000 per month and details of the products are as follows.Product Selling price $ per unit Variable cost $ per unitF 22 16G 15 12H 19 13The organization wishes to earn a profit of $52000 next month.Required:Calculate the required sales value of each product in order to achieve this target profit.
3. A large bakery buys sugar in 50-kg bags. The bakery uses an average of 1,344 bags a year. Preparing an order and receiving a shipment of sugar involves a cost of P135. Annual carrying costs are P 630 per bag. The bakery operates 280 days per year. Lead time = 2 weeks. a. Determine the economic order quantity. b. What is the average number of bags on hand? c. When should the bakery order for more sugar? d. How many times per year will the bakery order for sugar?
Thornton Electronics currently produces the shipping containers It uses to deliver the electronics products It sells. The monthly cost of producing 9,100 containers follows. Unit-level materials Unit-level labor Unit-level overhead Product-level costs* Allocated facility-level costs $ 5,100 6,400 3,300 9,900 28,000 *One-third of these costs can be avoided by purchasing the containers. Russo Container Company has offered to sell comparable containers to Thornton for $2.60 each. Required a. Calculate the total relevant cost. Should Thornton continue to make the containers? b. Thornton could lease the space it currently uses in the manufacturing process. If leasing would produce $12,100 per month, calculate the total avoidable costs. Should Thornton continue to make the containers? a. Total relevant cost a. Should Thornton continue to make the containers? b. Total avoidable cost b. Should Thornton continue to make the containers?
Royal Lawncare Company produces and sells two packaged products—Weedban and Greengrow. Revenue and cost information relating to the products follow: Product Weedban Greengrow Selling price per unit $ 9.00 $ 37.00 Variable expenses per unit $ 3.00 $ 13.00 Traceable fixed expenses per year $ 134,000 $ 36,000 Last year the company produced and sold 45,000 units of Weedban and 17,000 units of Greengrow. Its annual common fixed expenses are $107,000. Required: Prepare a contribution format income statement segmented by product lines.
Guadalupe Olayo produces grandfather clocks. Each grandfather clock normally sells for $1,500. The following manufacturing cost information per clock is available: Direct materials are $200, labor is $600, variable overhead is $50, and fixed overhead is $40 (based on planned production for the year of 1,200 clocks). Commissions are 10% of selling price, and fixed selling and administrative costs are $70,000. Guadalupe’s tax rate is 25%. A European company has asked Guadalupe to accept a special order for 400 clocks. Due to some minor design changes, the material and labor costs for the special order clocks would increase by 25%. Another production run would have to be scheduled for the special order, since the clocks are different from the regular clocks, at a cost of $2,200. In addition, Guadalupe would have to hire a temporary clerk to process the ISO and export paperwork for shipping to Europe, at a cost of $600. Commissions will be paid at the rate of 5% of the special order…
Gemerlapan Jewellery Sdn. Bhd. (GJSB) is considering a special order for 20 handerafted gold bracelets to be given to the clients' high achieving staffs during their annual dinner. The special price offered for this order is RM2,499. The normal selling price of a gold bracelet is RM2,999 and its unit product cost is as shown below: : RM 2,100 : RM250 Manufacturing overhead : RM 25 Direct material Direct labour Additional information: Most of the manufacturing overhead is fixed and unaffected by variations in how much jewellery is produced in any given period. However, RM5 of the overhead is variable with respect to the number of bracelets produced. The customer who made this special order would like special filigree applied to the bracelets. This filigree would require additional material costing RM4 per bracelet and would also require acquisition of a special tool costing RM450 that would have no other use once the special order is completed. This order would have no effect on the…
Jordan electronics currently produces the shipping containers it uses to deliver the electronics products it sells. The monthly costs of producing 9,100 containers follow Unit-level material $6,000 Unit-level labor $6,700 unit-level overhead $3,300 product-level costs* $11,700 Allocated facility-level costs $26,500 *one-third of these costs can be avoided by purchasing the containers. Russo container company has offered to sell comparable containers to Jordan for $2.80 each. Required a) Calculate the total relevant cost should Jordan continue to make the containers. b) Jordan could lease the space it currently uses in the manufacturing process if leasing would produce $11,700 per month, and calculate the total avoidable costs. Should Jordan continue to make the containers? a) Total relevant cost should Jordan continue to make the containers? Total avoidable cost Should Jordan continue to make the containers?

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