Please do not give solution in image format thanku Carlos Cavalas, the manager of Echo Products Brazilian Division, is trying to set the production schedule for the last quarter of theyear. The Brazilian Division had planned to sell 69,520 units during the year, but by September 30 only the following activity had beenreported:Inventory, January 1ProductionSalesInventory, September 30Units073,00063,2009,800The division can rent warehouse space to store up to 30,400 units. The minimum inventory level that the division should carry is 1,400units. Mr. Cavalas is aware that production must be at least 5,880 units per quarter in order to retain a nucleus of key employees.Maximum production capacity is 44,600 units per quarter.Demand has been soft, and the sales forecast for the last quarter is only 20,500 units. Due to the nature of the division's operations,fixed manufacturing overhead is a major element of product cost.Required:1a. Assume that the division is using variable costing. How many units should be scheduled for production during the last quarter ofthe year?1b. Assume that the division is using variable costing. Will the number of units scheduled for production affect the division's reportedincome or loss for the year?2. Assume that the division is using absorption costing and that the divisional manager is given an annual bonus based on divisionalnneration income if Mr Cavalae wante to maximize hie rivieinne narating income for the year how many tinite chould he erhadilar Required:1a. Assume that the division is using variable costing. How many units should be scheduled for production during the last quarter ofthe year?1b. Assume that the division is using variable costing. Will the number of units scheduled for production affect the division's reportedIncome or loss for the year?2. Assume that the division is using absorption costing and that the divisional manager is given an annual bonus based on divisionaloperating income. If Mr. Cavalas wants to maximize his division's operating income for the year, how many units should be scheduledfor production during the last quarter?Complete this question by entering your answers in the tabs below.Req 1AReq 18Assume that the division is using variable costing. How many units should be scheduled for production during the last quarterof the year?Required productionReq 1AReq 2Req 18unitsComplete this question by entering your answers in the tabs below.Req 2Pea 18Assume that the division is using absorption costing and that the divisional manager is given an annual bonus based ondivisional operating income. If Mr. Cavalas wants to maximize his division's operating income for the year, how many unitsshould be scheduled for production during the last quarter?Required productionunits

Variable costing is a managerial and cost accounting concept that eliminates fixed manufacturing…

Carlos Cavalas, the manager of Echo Products' Brazilian Division, is trying to set the production schedule for the last quarter of the year. The Brazilian Division had planned to sell 69,520 units during the year, but by September 30 only the following activity had been reported: Inventory, January 1 Production Sales Inventory, September 30 Units e 73,000 63,200 9,800 The division can rent warehouse space to store up to 30,400 units. The minimum inventory level that the division should carry is 1,400 units. Mr. Cavalas is aware that production must be at least 5,880 units per quarter in order to retain a nucleus of key employees. Maximum production capacity is 44,600 units per quarter. Demand has been soft, and the sales forecast for the last quarter is only 20,500 units. Due to the nature of the division's operations, fixed manufacturing overhead is a major element of product cost. Required: 1a. Assume that the division is using variable costing. How many units should be scheduled for production during the last quarter of the year? 1b. Assume that the division is using variable costing. Will the number of units scheduled for production affect the division's reported income or loss for the year? 2. Assume that the division is using absorption costing and that the divisional manager is given an annual bonus based on divisional nnaration income if Mr Caualae urante to maximize hie rivieinn'e nnarating income for the year how many unite child ha erhartlar

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q