| Direct Materials | 1.05 |
| Direct Labor | 0.46 |
| Variable MOH | 2.16 |
| Fixed Manufacturing overhead | 2.00 |
| total cost per unit | 5.67 |
| Sales Price Per Unit | 12.00 |
MSI has been approached by a fourth-grade teacher from Portland
about the possibility of creating a specially designed game that
would be customized for her classroom and environment. The teacher
would like an educational game to correspond to her classroom
coverage of the history of the Pacific Northwest, and the state of
Oregon in particular. MSI has not sold its products directly to
teachers or school systems in the past, but its Marketing
Department identified that possibility during a recent
meeting.
The teacher has offered to buy 1,700 copies of the CD at a price of
$5.00 each. MSI could easily modify one of its existing educational
programs about U.S. history to accommodate the request. The
modifications would cost approximately $480. A summary of the
information related to production of MSI’s current history program
follows:
1. Compute the incremental profit (or loss) from accepting the special order.
2. Should MSI accept the special order?
3. Suppose that the special order had been to purchase 1,700 copies of the program for $1.50 each. Compute the incremental profit (or loss) from accepting the special order under this scenario. IT IS NOT 1600$ I HAVE TRIED
4. Suppose that MSI is operating at full capacity. To accept the special order, it would have to reduce production of the history program. Compute the special order price at which MSI would be indifferent between accepting or rejecting the special order.
In: Accounting
| auditing | tax | consulting | total | |||
| revenues | $1,625,000 | $450,000 | $700,000 | $2,775,000 | ||
| variable cost | $420,000 | $276,000 | $470,000 | $1,166,000 | ||
| contribution margin | $1,205,000 | $174,000 | $230,000 | $1,609,000 | ||
| direct fixed cost | $100,000 | $175,000 | $190,000 | $465,000 | ||
| segmetn margin | $1,105,000 | -$1,000 | $40,000 | $1,144,000 | ||
| allocated fixed costs | $375,000 | $115,000 | $175,000 | $665,000 | ||
| net income | $730,000 | -$116,000 | -$135,000 | $479,000 | ||
| invested assets | $2,000,000 | $230,000 | $100,000 | $2,330,000 | ||
The amounts shown as 'direct fixed costs' represent salaries of professional personnel directly traceable to the respective divisions. The 'allocated fixed costs' represent central administrative charges for the firm overall and are not directly traceable to specific divisions of the firm.
BCS has a thriving audit practice for which there is increasing demand. Since both the Tax and Consulting divisions of the practice are losing money, the firm is considering whether they should close one or both of those divisions to make room for extra audit clients. Bhat feels that the consulting group should be eliminated since it is showing a loss of $135,000 while the tax division is only showing a loss of $116,000. Cunha argues that the tax division should be eliminated, while Sutera thinks they should both be shut since they are both losing money.
|
76.Based on the information shown above, which partner is correct and WHY? The firm has decided that, in order to make room for audit clients, they MUST discontinue one of the divisions. Consider the following additional information regarding this decision: If the tax division is dropped, many of those professionals could be used elsewhere in the firm and could be reassigned to either the audit or consulting divisions and, accordingly, $125,000 (of the $175,000) of direct fixed salaries will be transferred to the other divisions. The remainder of the personnel would, unfortunately, have to be let go. Also, if the tax division is dropped, audit revenues are estimated to increase by $340,000. Consulting revenues would be unaffected. What would be the incremental income (or loss) if the tax division was discontinued? The consulting staff is not as versatile or useful in audit and tax areas, thus, if the consulting division were discontinued, most would have to be let go and could not be used in the audit or tax areas. In this case, $175,000 (of the $190,000) salaries would be dropped with the remainder being reassigned elsewhere in the firm. In addition, if the consulting division is discontinued, revenues of the audit division will increase by only $250,000 and tax-division revenues would be unaffected. What would be the incremental income (or loss) if the consulting division was discontinued? Based on the above, do you recommend closing the tax division or the consulting division AND by how much (what is the incremental benefit of making the correct decision)? |
In: Accounting
Production volume
400
450
550
600
700
750
Total cost
4000
5000
5400
5900
6400
7000
| An important application of regression analysis in accounting
is in the estimation of cost. By collecting data on volume and cost
and using the least squares method to develop an estimated
regression equation relating volume and cost, an accountant can
estimate the cost associated with a particular manufacturing
volume. Consider the following sample of production volumes and
total cost data for a manufacturing operation. Excel File: data12-21.xls
|
In: Statistics and Probability
|
||||||||||||||||||||||||||||
using the gleason products data from above perform a LEAST REGRESSION ANALYSIS on the data ( use excel to perform analysis)
a) what is Gleasons total fixed cost?
b) what is Gleasons varaiable cost per unit?
c) what would total cost be for a month with 7500 units produced?
d) what proportion of varaiation in Gleasons cost is explained by a varaince in production?
In: Accounting
| Data | |||||||||||||||||||||||||||||||||
| 4 | Allocation base | Machine-hours | |||||||||||||||||||||||||||||||
| 5 | Estimated manufacturing overhead cost | $448,000 | |||||||||||||||||||||||||||||||
| 6 | Estimated total amount of the allocation base | 70,000 | machine-hours | ||||||||||||||||||||||||||||||
| 7 | Actual manufacturing overhead cost | $436,600 | |||||||||||||||||||||||||||||||
| 8 |
Actual total amount of the allocation base 77,000 Machine hours
|
||||||||||||||||||||||||||||||||
|
By how much is the manufacturing overhead underapplied or overapplied? |
|
|
Change the estimated total amount of the allocation base back to 70,000 machine-hours, so that the data area of you worksheet looks exactly the same as in Requirement 2. Now change the actual manufacturing overhead cost from $436,600 to $428,300. The data area of your worksheet should now look like this: |
| Data | ||||
| 4 | Allocation base | Machine-hours | ||
| 5 | Estimated manufacturing overhead cost | $448,000 | ||
| 6 | Estimated total amount of the allocation base | 70,000 | machine-hours | |
| 7 | Actual manufacturing overhead cost | $428,300 | ||
| 8 | Actual total amount of the allocation base | 77,000 |
machine-hours |
|
|
By how much is the manufacturing overhead underapplied or overapplied? |
|
In: Accounting
Suppose that each firm in a competitive industry has the following costs:
| Total Cost: | TC=50+12q2TC=50+12q2 |
| Marginal Cost: | MC=qMC=q |
where q is an individual firm's quantity produced.
The market demand curve for this product is:
| Demand | QD=140−2PQD=140−2P |
where P is the price and Q is the total quantity of the good.
Each firm's fixed cost is ($ )
What is each firm's variable cost?
A) 50+1/2q
B) q
C) 1/2q
D) 1/2q ^2
Which of the following represents the equation for each firm's average total cost?
A) 50/q+1/2q
B) 50/q
C) 1/2q
D) 50+1/2 q
Complete the following table by computing the marginal cost and average total cost for q from 5 to 15.
|
q |
Marginal Cost |
Average Total Cost |
|---|---|---|
|
(Units) |
(Dollars) |
(Dollars) |
| 5 | ||
| 6 | ||
| 7 | ||
| 8 | ||
| 9 | ||
| 10 | ||
| 11 | ||
| 12 | ||
| 13 | ||
| 14 | ||
| 15 |
The average total cost is at its minimum when the quantity each firm produces (q) equals
.
Which of the following represents the equation for each firm's supply curve in the short run?
A) 1/2q ^2
B) q
C) 50-q
D) 120- 1/2q^2
In the long run, the firm will remain in the market and produce if (q<_15, q>_10, q>_5,5<q<15)
Currently, there are 8 firms in the market.
In the short run, in which the number of firms is fixed, the equilibrium price is ($ ) and the total quantity produced in the market is ( ) units. Each firm produces ( )units. (Hint: Total supply in the market equals the number of firms times the quantity supplied by each firm.) In this equilibrium, each firm makes a profit of ($ )(Note: Enter a negative number if the firm is incurring a loss.)
Firms have an incentive to (enter/exit) the market.
In the long run, with free entry and exit, the equilibrium price is ($ ) and the total quantity produced in the market is ( ) units. There are ( )firms in the market, with each firm producing ( )units.
In: Economics
Exhibit 2 Quantity Sold Price (units) Total Cost $10 10 $80 9 20 100 8 30 130 7 40 170 6 50 230 5 60 300 4 70 380 A single-price monopolist is a monopolist that sells each unit of its output for the same price to all its customers. Refer to Exhibit 2. A single-price monopolist that seeks to maximize profits will sell __________ units and charge a per-unit price of __________. Group of answer choices
20; $9
40; $7
50; $6
10; $10
7; $40
In: Economics
In: Electrical Engineering
Kozlov Corporation has provided the following data from its
activity-based costing system:
| Activity Cost Pool | Total Cost | Total Activity | |||||
| Assembly | $ | 1,022,580 | 78,000 | machine hours | |||
| Processing orders | $ | 104,650 | 2,300 | orders | |||
| Inspection | $ | 160,312 | 2,320 | inspection hours | |||
The company makes 440 units of product A21W a year, requiring a
total of 820 machine-hours, 50 orders, and 20 inspection-hours per
year. The product's direct materials cost is $35.32 per unit and
its direct labor cost is $29.32 per unit. According to the
activity-based costing system, the average cost of product A21W is
closest to:
$97.38 per unit.
$68.14 per unit.
$64.64 per unit.
$95.76 per unit.
$52.25 per unit.
In: Accounting
A manager is trying to determine which of three production processes to implement to produce a component for a new product line. Process A would entail a variable cost of $17 per unit and an annual fixed cost of $150,000. Process B would entail a variable cost of $11 per unit and an annual fixed cost of $250,000. Process C would entail a variable cost of $20 per unit and an annual fixed cost of $180,000.
a. Develop three separate models in your spreadsheet to calculate Total cost for each process.
The models must be flexible and able to calculate Total cost for any Quantity produced.
b. Create a Cost-Volume graph that shows total cost lines for all three options.
(Volume should range from 0 to 30,000)
c. Write an interpretation of your graph
In: Operations Management