Ex 14-45P&SCarpetWPSales380,000460,000140,000Variable costs228,000322,000112000Contribution margin.152,000138,00028,000CM Ratio0.40.30.21If Wall paper operation is closedLoss of contribution from WP-28,000Increase in contribution from carpet65000Remodeling cost-12400 4133.333333Saving in fixed cost18000Loss of contribution from P&S-30400Increase in Advertisement-25000-12,800Ex 14-47TotalPer unitPurchased components 120,00012Assembly labor 300,00030Variable manufacturing overhead 300,00030Total relevant cost 720,00072Ex 14-511Incremental cost of B81Direct material 3.75Direct labor 4.50Variable overhead 2.25Total variable cost per unit 10.50Purchase price13.50Loss per unit if purchased-3.00Loss per mach hr if purchased-1T79B812 Purchase price quoted 11.2513.50Direct material 2.253.75Direct labor 4.004.50Variable overhead 2.002.25Total variable cost 8.2510.50Net benefit of making3.003.00Mach hrs per unit2.53Benefit from mach hr1.21Best Use8000 units of T79Mach hrs reqd.20000Balance hrs21000No. of units of B 81 that can be made7000No. of units of B 81 to be purchased40003Maximum price for B 81
This is the end of the preview.
access the rest of the document.