Use below information for Questions 1 to 2: Company X produces industrial robots for high-precision manufacturing. The following information is available for Company X: Item Per unit Total Direct materials 383 Direct labor Variable MOH Fixed MOH Variable Selling and Admin expenses Fixed Selling and Admin expenses 290 72 1,550,000 55 324,000 The company has a desired return on investment (ROI) ratio of 21%. It has invested TL54 for this business and anticipates production of 3,000 units per annum. Q-1) Compute the target selling price. Q-2) Compute realized ROI if actual sales units turn out to be 2,300 per annum. Q-3) Company X rebuilds spot welders for manufacturers. The following budgeted cost data for 2017 is available: Item Time Charges Material Loading Charges Technicians' wages and benefits Parts manager's salary and benefits Office employee's salary and benefits Other overhead 223,000 42,500 38,000 9,000 15,200 25,000 The company desires a TL30 profit margin per hour of labor and a 21% profit margin on parts. It has budgeted for 7,610 hours of labor time next year and estimated that the total invoice cost of parts and materials in 2017 would be TL400,000. Company X received a price quote for a rebuilding job in which 41 hours of labor and TL2,500 of parts is estimated to be used. Compute total estimated bill. Use below information for Questions 4 to 5: Company X is a division of Company ABC. X produces pagers and other personal communication devices. These devices are sold to other ABC divisions, as well as to other communication companies. Company X was recently approached by the manager of an ABC division, Company Y, regarding a request to make a special pager designed to receive signals from anywhere in the world. Company Y requested that Company X produce 12,300 units of this special pager. The following facts are available regarding the Company X: Amount Unit Selling price of standard pager Variable cost of standard pager Additional variable cost of special pager per unit TL per unit TL per unit TL 95 55 31 For each independent case below, enter 5 if the Company X should sell the pager to Company Y, enter 10 if the Company X should sell the pager externally, and enter 15 if the Company X should be indifferent to sell the pager externally versus internally. Q-4) Company Y offers to pay TL115 and Company X will forgo 5,100 units of standard pagers. Q-5) Company Y offers to pay TL115 and Company X will forgo 13,100 units of standard pagers.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Use below information for Questions 1 to 2:
Company X produces industrial robots for high-precision manufacturing. The following information is available for
Company X:
Item
Per unit
Total
Direct materials
383
Direct labor
Variable MOH
Fixed MOH
290
72
1,550,000
Variable Selling and Admin expenses
Fixed Selling and Admin expenses
55
324,000
The company has a desired return on investment (ROI) ratio of 21%. It has invested TL54m for this business and
anticipates production of 3,000 units per annum.
Q-1) Compute the target selling price.
Q-2) Compute realized ROI if actual sales units turn out to be 2,300 per annum.
Q-3) Company X rebuilds spot welders for manufacturers. The following budgeted cost data for 2017 is available:
Item
Time Charges
Material Loading Charges
Technicians' wages and benefits
Parts manager's salary and benefits
Office employee's salary and benefits
Other overhead
223,000
42,500
38,000
9,000
15,200
25,000
The company desires a TL30 profit margin per hour of labor and a 21% profit margin on parts. It has budgeted for
7,610 hours of labor time next year and estimated that the total invoice cost of parts and materials in 2017 would
be TL400,000. Company X received a price quote for a rebuilding job in which 41 hours of labor and TL2,500 of
parts is estimated to be used. Compute total estimated bill.
Use below information for Questions 4 to 5:
Company X is a division of Company ABC. X produces pagers and other personal communication devices. These
devices are sold to other ABC divisions, as well as to other communication companies. Company X was recently
approached by the manager of an ABC division, Company Y, regarding a request to make a special pager designed to
receive signals from anywhere in the world. Company Y requested that Compay X produce 12,300 units of this special
pager. The following facts are available regarding the Company X:
Item
Amount
Unit
Selling price of standard pager
Variable cost of standard pager
Additional variable cost of special pager
95
55
per unit TL
per unit TL
per unit TL
31
For each independent case below, enter 5 if the Company X should sell the pager to Company Y, enter 10 if the
Company X should sell the pager externally, and enter 15 if the Company X should be indifferent to sell the pager
externally versus internally.
Q-4) Company Y offers to pay TL115 and Company X will forgo 5,100 units of standard pagers.
Q-5) Company Y offers to pay TL115 and Company X will forgo 13,100 units of standard pagers.
Transcribed Image Text:Use below information for Questions 1 to 2: Company X produces industrial robots for high-precision manufacturing. The following information is available for Company X: Item Per unit Total Direct materials 383 Direct labor Variable MOH Fixed MOH 290 72 1,550,000 Variable Selling and Admin expenses Fixed Selling and Admin expenses 55 324,000 The company has a desired return on investment (ROI) ratio of 21%. It has invested TL54m for this business and anticipates production of 3,000 units per annum. Q-1) Compute the target selling price. Q-2) Compute realized ROI if actual sales units turn out to be 2,300 per annum. Q-3) Company X rebuilds spot welders for manufacturers. The following budgeted cost data for 2017 is available: Item Time Charges Material Loading Charges Technicians' wages and benefits Parts manager's salary and benefits Office employee's salary and benefits Other overhead 223,000 42,500 38,000 9,000 15,200 25,000 The company desires a TL30 profit margin per hour of labor and a 21% profit margin on parts. It has budgeted for 7,610 hours of labor time next year and estimated that the total invoice cost of parts and materials in 2017 would be TL400,000. Company X received a price quote for a rebuilding job in which 41 hours of labor and TL2,500 of parts is estimated to be used. Compute total estimated bill. Use below information for Questions 4 to 5: Company X is a division of Company ABC. X produces pagers and other personal communication devices. These devices are sold to other ABC divisions, as well as to other communication companies. Company X was recently approached by the manager of an ABC division, Company Y, regarding a request to make a special pager designed to receive signals from anywhere in the world. Company Y requested that Compay X produce 12,300 units of this special pager. The following facts are available regarding the Company X: Item Amount Unit Selling price of standard pager Variable cost of standard pager Additional variable cost of special pager 95 55 per unit TL per unit TL per unit TL 31 For each independent case below, enter 5 if the Company X should sell the pager to Company Y, enter 10 if the Company X should sell the pager externally, and enter 15 if the Company X should be indifferent to sell the pager externally versus internally. Q-4) Company Y offers to pay TL115 and Company X will forgo 5,100 units of standard pagers. Q-5) Company Y offers to pay TL115 and Company X will forgo 13,100 units of standard pagers.
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