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
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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
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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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