CerroniD.ACC240.Topic7.xlsx - Instructor note See page 495...

This preview shows page 1 - 10 out of 30 pages.

Instructor note: See page 495 and 496 for how to set up the incremental analysis (illustration 12-4)a. Incremenatl Analysis ParticularsReject orderAccept OrderNet Income/ Increase (Decrease)revenues$0$280,000$280,000COGS$0$220,000 ($220,000)Selling and Admin Expenses $0$22,500 ($22,500)Net income increase$37,500b. The company should accept the order as it will produce net income of $37500.c. Selling price per unit=Salesnet income+ COGS +Admin exp
Units soldsales$292,500.00$29.25$10,000.00d. Non financial factors that should be considered are how the dicision effects the customer, the abspecial order and the long term financial increase based on the fact of the new customers abioity t
)
Instructor note: See page 497 and 498 for how to set up the incremental analysis (illustration 12-a. Incremental Analysis Make BuyNet Increase or Decrease Direct material$38,400$0$38,400Direct Labor$34,400$0$34,400Indirect Labor$3,440$0$3,440Utilities$3,200$0$3,200Depreciation $3,000$900$2,100
Property tax$700$200$500Insurance$1,500$600$900Purchase price$0$80,000-$80,000Freight$0$2,800-$2,800receiving $0$1,300-$1,300total$84,640$85,800-$1,160b. Based on the analysis, the compaany should continue to make the parts because buying then wc. If the company had the opportunoty to produce $3000 in net income them they should start tod. the nonfinancial factors that should be considered is wehre the materials are coming from andmaterials, and how this will effect the current work staff along with future liabilites when having
-6 & 12-7)
P12-3 Determine if product should be sold or processed further.Thompson Industrial Products Inc. (TIPI) is a diversified industrial-cleaner processing coproduces two products: a table cleaner and a floor cleaner from a common set of chemiounces of chemical input are processed at a cost of $210,000 into 600,000 ounces of flocleaner. The floor cleaner has no market value until it is converted into a polish with theprocessing costs for this conversion amount to $240,000.FloorShine sells at $20 per 30-ounce bottle. The table cleaner can be sold for $17 pcleaner can be converted into two other products by adding 300,000 ounces of another of table cleaner. This joint process will yield 300,000 ounces each of table stain removeadditional processing costs for this process amounts to $100,000. Both table products The company decided not to process the table cleaner into TSR and TP based on thProTableTable StainCleanerRemover (TSR)Production in ounces300,000300,000Revenue$204,000$168,000Costs:CDG costs70000*52,500TCP costs050,000Total costs70,000102,500Weekly gross profit$134,000$65,500*If table cleaner is not processed further, it is allocated 1/3 of the $210,000 of CDtotal physical output.** If table cleaner is processed further, total physical output is 1,200,000 ounces.50% of the total physical output and are each allocated 25% of the CDG cost.Instructions(a)

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture