3.3 apr%2027%20ch08%20extra%20egs%20solns.ppt

# 3.3 apr%2027%20ch08%20extra%20egs%20solns.ppt - Sales (\$42...

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ACIS222 Chapter 8 Extra Examples Solutions

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Ch8egs- Ch8egs- 2 Solution: Wright Company 1. Selling price \$7.50 Less relevant costs: Direct materials \$2.00 Direct labour \$3.10 Variable overhead \$1.80 6.90 Increase in profits \$0.60 x units ordered x 3 800 Total increase in profits \$2 280 1. \$2 280 – \$1 000 = \$1 280 profit
Ch8egs- Ch8egs- 3 Solution: Blackfoot Company 1. C \$000 Sales 200 Less: Variable expenses - 140 Contribution margin 60 Less: Direct fixed exp. - 45 Segment margin 15 1. if drop Product C, lose: 10% x B’s CM of \$950 000 95 C's segment margin 15 Overall decrease in profits 110

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Ch8egs- Ch8egs- 4 Solution: Pierre Machine Works Cost to make: \$ Direct materials 5.00 Direct labour 2.38 Variable overhead 1.90 Total relevant costs \$ 9.28 per unit Cost to buy: \$11.00 per unit
Ch8egs- Ch8egs- 5 Qualitative factors: quality timely delivery stable pricing effect on employees Decision: continue to make component C- 430

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Ch8egs- Ch8egs- 6 Solution: Dowd Company 1. Sold at split-off point: Gross profit (\$24 x 1 000) \$24 000 Processed further:

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Unformatted text preview: Sales (\$42 x 1 000) 42 000 Less cost of goods sold 7 150 Gross profit \$34 850 Decision: Pyrol should be processed further 1. Sold at split-off point: Gross profit (\$24 x 1 000) \$24 000 Processed further: Sales (\$42 x 1 000) 42 000 Less: Cost of goods sold 7 150 Distribution (\$0.80 x 1 000) 800 Sales commission (\$42 000 x 10%) 4 200 Gross profit \$29 850 Decision: Pyrol should be processed further Ch8egs-Ch8egs-8 Solution: Norton Company 1. Total contribution margin Juno (2 000 units x \$30) 60 000 Hera (4 000 units x \$60) 240 000 Total \$300 000 1. Contribution for constrained resource Juno (\$30/2) \$15/kg Hera (\$60/5) \$12/kg Usage of materials Materials available 16 000 Juno (2 000 units x 2 kg)- 4 000 Available for Hera 12 000 kg/unit of Hera 5 Units of Hera 2 400 Contribution margin Juno (2 000 units x \$30) 60 000 Hera (2 400 units x \$60) 144 000...
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## This note was uploaded on 12/23/2009 for the course BCOM ACIS 222 taught by Professor Neilcrombie during the Spring '09 term at Canterbury.

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3.3 apr%2027%20ch08%20extra%20egs%20solns.ppt - Sales (\$42...

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