following information relates to current production:Sale price per unitVariable costs per unit:ManufacturingMarketing and administrativeTotal fixed costs:ManufacturingMarketing and administrativeCoGuard accepts a special sales order for 5,000 motors at a price of $240 per unit. In orderto do so, it decides to cut sales to regular clients. As a result of this decision, how would operating income be affected?18. The following information is related to Nakumatt SupermarketSales RevenuesVariable CostsFixed CostsOperating IncomeThe pharmacy is generating losses for the last four years. The manager is considering closing downthe pharmacy. If the pharmacy is closed, the pharmacist will be laid off. His salary is $60,000/period.The space of the pharmacy will be used to expand the bakery, which is expected to double their SalesRevenues.What is the new net income if the Pharmacy is shut down?
19. Plainfield Company manufactures Part G for use in its production cycle. The costs per unitfor 10,000 units of Part G are as follows:Direct materials $ 3Direct labor 15Variable overhead 6Fixed overhead 8Verona Company has offered to sell Plainfield 10,000 units of Part G for $30 per unit. IfPlainfield accepts Verona's offer, the released facilities could be used to save $45,000 in relevant costs in the manufacture of Part H. In addition, $50,000 of the fixed overhead applied to Part G would be totally eliminated. What alternative is more desirable and by what amount is it more desirable?20. What budget is required before a DM Purchase Budget?21. What could be the effect of a favourable direct material price variance due to purchasinglower quality material?22. Define budgets, budgeting, budgetary slack, 4-types of responsibility centres, motivators of budgetary padding to achieve budgetary slack23. Explain and give examples of sunk costs, common costs, irrelevant costs, and opportunitycosts in decision making.24. Tudor Inc. incurred: $500 in overtime labour costs due to a customer request, $200 in overtime due to poor scheduling; $150 in labour costs due to idle time due to machine maintenance, and $140 in labour cost due to idle time attributable to a customer who delayeddelivery of the equipment. Calculate how much are direct costs, indirect costs, product costs,period costs, prime costs, conversion costs, total manufacturing costs, manufacturing overhead costs:25. Oh-To-Tec uses normal costing. Factory overhead is applied to production at a predetermined rate of 200% of direct-labour cost. Any over or under-applied factory overhead is closed to the cost of goods sold account at the end of each month. Additionalinformation is available as follows for October 2014:• A transmission change job was started and completed during October. This was the onlyjob during the month• Direct materials used including transmission replacement and oil totaled $1,000• Total direct labour paid for the job is $800• Total actual factory overhead was $1,800 for the month• Oh-To-Tec usually sells the job at 150% markupCalculate the cost of goods manufactured for October, and the gross profit for October.
- Spring '15