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- Company A manufactures two products A and B that sells for 120€ and 80€ respectively. Each product uses only one type of raw materials that costs 6€ per kilogram. The company has the capacity to annually produce 100000 units of each product. The company considers its traceable fixed mahufacturing overhead to be avoidable and its common fixed expenses are unavoidable and have been allocated to products based on sales in euros. Company's average cost per unit for each product at annual level of activity is provided in the table. Items Product costs in euro A B Direct materials 30 12 Direct labour 20 15 Variable manufacturing overhead 7 5 Traceable fixed manufacturing overhead 16 18 Variable selling expenses 12 8 Common fixed expenses 15 10 Total costs per unit 100 68 (Answer each question independently unless instructed otherwise) Assume that Company normally produces and sells 40000 units of product B per year. Evaluate, what is the financial advantage…Assume Samsung and Apple are bidding on a large device support service job for a U.S.-based business. Samsung estimates direct labor for this service job to include 800 phone support hours and 1,200 technical specialist hours. Samsung pays phone support staff $11 per hour and technical specialists $22 per hour. Overhead is applied using a rate of $24 per direct labor hour (for both types of labor). For Samsung, what is this job’s estimated total cost? Samsung believes that the customer will choose the company that offers the lower price. If Samsung applies a markup of 30% on total cost, will its quoted price be lower than Apple’s expected quoted price of $105,000?Jireh Limited also manufactures prefab components for the housing industry. They have just been offered a new four year contract to supply a component, subject to them meeting certain quality requirements set by GREDA Ghana. The production manager is concerned that the current machine, which has been fully depreciated, will not be able to meet the stringent quality controls that will be required because the technology is obsolete, and the machine is unreliable. The company currently spends £50,000 per year to maintain and operate this machine which has no secondhand market value. On the basis of the production managerʼs recommendation, management has decided to replace the current machine. It is estimated that the replacement machine will cost £1 million with a four-year useful life. The companyʼs depreciation policy is to use a 20% reducing balance method over the life of the asset. As part of the purchase agreement for the new machine, the suppliers are offering a special maintenance…
- Haver Company currently pays an outside supplier $33 per unit for a part for one of its products. Haver is considering two alternative methods of making the part. Method 1 for making the part would require direct materials of $14 per unit, direct labor of $17 per unit, and incremental overhead of $3 per unit. Method 2 for making the part would require direct materials of $14 per unit, direct labor of $11 per unit, and incremental overhead of $7 per unit. Required: 1. Compute the cost per unit for each alternative method of making the part. 2. Should Haver make or buy the part? If Haver makes the part, which production method should it use? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the cost per unit for each alternative method of making the part. Cost per unit Make with Method 1 Make with Method 2 Cost per unit $ 0 Required 1 $ 0 $ Buy Required 2 >Company A manufactures two products A and B that sells for 120 € and 80 € respectively. Each product uses only one type of raw materials that costs € 6 per kilogram. The company has the capacity to annually produce 100,000 units of each product. The company considers its traceable fixed mahufacturing overhead to be avoidable and its common fixed expenses are unavoidable and have been allocated to products based on sales in euros. The Company's average cost per unit for each product at the annual level of activity is provided in the table. Items Product costs in euro A B Direct materials 30 12 Direct labor 20 15 Variable manufacturing overhead 7 5 Traceable fixed manufacturing overhead 16 18 Variable selling expenses 12 8 Common fixed expenses 15 10 Total costs per unit 100 68 (Answer each question independently unless instructed otherwise) Assume that the Company expects to produce and sell 90000 units of product B during the current year. A new customer…Kofi Abebrese runs a small industrial company that specialized in the production of high standardwindows for housing estates. A worker is paid GH¢0.9 per hour and can produce two window swith an hour. Each window uses a frame costing GH¢1 and incur a variable overheads of GH¢0.7.Each window sells for GH¢3. Currently, due to the economic condition, work is rather slack and three employees are occupied in carrying out extensive repairs to Kofi Abebrese's own house.Kofi owns a warehouse next to the factory, which had been used as a factory store, in the past. Itis now let out on a renewable annual lease of GH¢600.A new building company, Allied Consult, which specializes in the production of prefabricatedhouses has asked Kofi if he would be interested in accepting a contract for GH¢30,000 which willbe for a year initially, to produce molded internal building sections. Kofi estimates that, thecontract will take 13,200 hours of works, or the work of five men for a year, and that…
- Kofi Abebrese runs a small industrial company that specializes in the production of high-standard windows for housing estates. A worker is paid GH¢0.9 per hour and can produce two windows with an hour. Each window uses a frame costing GH¢1 and incurs a variable overhead of GH¢0.7. Each window sells for GH¢3. Currently, due to the economic condition, work is rather slack and three employees are occupied in carrying out extensive repairs to Kofi Abebrese's own house. Kofi owns a warehouse next to the factory, which had been used as a factory store, in the past. It is now let out on a renewable annual lease of GH¢600. A new building company, Allied Consult, which specializes in the production of prefabricated houses has asked Kofi if he would be interested in accepting a contract for GH¢30,000 which will be for a year initially, to produced molded internal building sections. Kofi estimates that the contract will take 13,200 hours of works, or the work of five men for a year, and that…Scottish Souvenirs Company has a Sewing Division that does sewing work of various types. The company's Overseas Division has asked the Sewing Division to provide it with 4,000 special silk scarves each year on a continuing basis. The special silk scarf would require £28 per unit in variable production costs. The Overseas Division has a bid from an outside supplier for the special silk scarf at £44.00 per unit. In order to have time and space to produce the new special silk scarf, the Sewing Division would have to cut back production of another scarf - the Classic- which it presently is producing. The Classic scarf sells for £30 per unit, and requires £22 per unit in variable production costs. Boxing and shipping costs of the Classic scarf are £4 per unit. Boxing and shipping costs of £7 per unit (special silk scarf) will also be incurred on internal transfers. The company is now producing and selling 100,000 units of the Classic scarf each year. Production and sales of the Classic…A company manufactures computer games. The games are in demand all year round and in the next financial year the sales manager plans to sell 12,000 games. The trainee's management accountant has provided the following cost information for 1 unit of computer game. The selling price is £10.00, and the variable cost will consist of direct, materials £1.00 per unit, direct labour cost £5.00 per unit. The fixed cost for the year is expected to be £32,000. Required: You have been asked to provide information that will help the managing director consider the effect on profitability changes in the level of sales activity next year Draw up a marginal statement that calculates the contribution per unit Draw up a marginal cost statement on the basis that 12,000 units will be sold and calculate a. b. the net profit or loss Briefly explain what is meant by breakeven points С. d. Calculate the breakeven units in value and explain what it means to the director Calculate the sales activity to reach a…
- Company A manufactures two products A and B that sells for 120€ and 80€ respectively. Each product uses only one type of raw materials that costs 6€ per kilogram. The company has the capacity to annually produce 100000 units of each product. The company considers its traceable fixed mahufacturing overhead to be avoidable and its common fixed expenses are unavoidable and have been allocated to products based on sales in euros. Company's average cost per unit for each product at annual level of activity is provided in the table. Items Product costs in euro A B Direct materials 30 12 Direct labour 20 15 Variable manufacturing overhead 7 5 Traceable fixed manufacturing overhead 16 18 Variable selling expenses 12 8 Common fixed expenses 15 10 Total costs per unit 100 68 (Answer each question independently unless instructed otherwise) Calculate, what contribution margin per kilogram of raw material is earned by product A.Company A manufactures two products A and B that sells for 120€ and 80€ respectively. Each product uses only one type of raw materials that costs 6€ per kilogram. The company has the capacity to annually produce 100000 units of each product. The company considers its traceable fixed mahufacturing overhead to be avoidable and its common fixed expenses are unavoidable and have been allocated to products based on sales in euros. Company's average cost per unit for each product at annual level of activity is provided in the table. Items Product costs in euro A B Direct materials 30 12 Direct labour 20 15 Variable manufacturing overhead 7 5 Traceable fixed manufacturing overhead 16 18 Variable selling expenses 12 8 Common fixed expenses 15 10 Total costs per unit 100 68 (Answer each question independently unless instructed otherwise) Calculate, how many kilograms of raw material are needed to make one unit of product B.Skilled labour at a manufacturing plant is in short supply, and all available skilled labour time is fully utilised. A customer has asked for a special job that will cost $400 in direct materials and will require 15 hours of skilled labour time. Skilled labour costs $8 per hour and variable production overhead is $2 per hour. Fixed production overheads are absorbed at a rate of $20 per skilled labour hour. If the job is undertaken the skilled labour will be withdrawn from work on making items that earn a contribution of $25 per skilled labour hour. What is the minimum price that should be charged if this special job is undertaken? O $775 O $895 $925 $1,225 O
