Following is a list of inventory transactions for NET P/L (unit cost is GST exc amount). NET P/L uses a perpetual average cost inventory system.

1. Complete the inventory table below .

2. Answer the questions following the table

All answers are numbers which consist only of the digits 0 to 9. Symbols or punctuation marks should NOT be incorporated in answers.

Each box must be completed. If there is no value enter 0 (zero).

Question 3: Case study on Star Pharma
Star Pharma is a pharmaceutical firm operating in Singapore. It serves two channels: (a) small
pharmacy stores and (b) large pharmacy stores. Star Pharma has four customers in total, two
of which are small pharmacies (C1 and C2) and the other two are large pharmacies (C3 and
C4). Star Pharma uses a discount pricing strategy and prices its products at variable cost plus
25%.
Relevant data for the year 2019 is as follows:
Particulars C1 C2 C3 C4
Number of orders 4 9 6 3
Average order value before discount $40,000 $20,000 $425,000 $400,000
Average discount 4.5% 9.5% 17.5% 11.5%
Regular deliveries 4 9 6 3
Expedited deliveries 2 0 2 0
Other important information:
Variable cost of goods sold amount to 80% of gross sales for each customer.
The general administration cost to small pharmacies for the year 2019 was $20,250 and the
general administration cost to serve large pharmacies was $48,375.
The total order processing cost for the year 2019 was $16,500. The cost driver for order
processing cost was number of orders.
The total cost for making regular deliveries in the year 2019 was $8,250. The cost driver for
regular delivery cost was number of regular deliveries made.
The total cost for expedited deliveries in the year 2019 was $5,000. The cost driver for
expedited delivery cost was number of expedited deliveries made.
Required:
(a) Calculate the activity cost driver rates for order processing, regular deliveries and
expedited deliveries.
(b) Prepare a customer profitability statement that shows the contribution and operating
profit from each customer and each customer channel.

2-What are the three primary types of cost behavior and how do they differ?

3-Give an example of variable cost.

4-Give an example of a fixed cost

5- Give an example of a mixed cost

6- What is the contribution margin?

11-What is the breakeven point?

12-How do you compute the breakeven point in dollars? • Exercises and problems 1, 2, 3, 4 (replace your workplace with “pizza shop”), 5, 9, 10 1-Classify the following costs as fixed, variable, or mixed. a) Building depreciation b) Employee wages c) Ticket printing costs d) Manager salaries e) Utilities f) Food and beverage costs g) Grounds maintenance h) Movie licensing fees

2- Classify the following costs as fixed, variable or mixed.

a) Janitorial services

b) Paper and ink costs

c) Advertising

d) Equipment depreciation

e) Repair and maintenance

f) Delivary driver salaries: Variable cost

g) Sales force commessions :

h) News wire fees.

3- Fill in the missing components for each of the following profit-planning formulas:

a) Contribution Margin Ratio (%)= --------------------divided by Unit Sales Price

b) Net Income =---------------- -Total Fixed costs

c) ---------------------= Total Fixed Costs Divided by Contribution Margin Ratio(%).

d) Contribution Margin Per Unit= Unit Sales Price - --------

e) Breakeven point( in Units) = Total Fixed cost divided by ---------------

f) Total contribution Margin = ----------------------x sales volume (in units)

g) Total Sales = ------------ x sales volum ( in Units)

h) Total Costs = Total Fixed Costs + ------------------------------------

4- Medical office a) Identify ten specific costs ( for example, rent, and wages) that the office will incur.

b) Classify each cost that you identified in part one as a variable, fixed or mixed and justify your classification.

Write your thoughts on this discussion

In regard to this week’s forum post and the information presented this week, General Motors better known as GM is a corporation that has been around for years. In order to be successful like GM, they have established a foot hold in over 26 countries selling its product in over 150 different countries. This will allow them to maximize profits. The term profit maximization refers to an organizations ability to sell products, services, and or goods so they can achieve a marginal revenue that is equal to the marginal cost when the value of that marginal cost increases. Corporations are in the business of making as much profit as possible, this can be achieved by two different concepts of profit maximization and revenue maximization (Cromwell, 2019).

            As for General Motors, a company that understands profit and revenue, in order to maximize its profits, they have to understand how to utilize the Profit Maximization Rule. This rule states that GM needs to designate a specific level of output where the Marginal Cost (MC) is equal to the Marginal Revenue (MR). From there the marginal cost curve will begin to rise, the most important detail of this procedure is that the marginal cost, it must be equal to the marginal revenue to see the curve elevate. Marginal cost can be defined as the increase in cost by which one or more items are produced. Marginal revenue is the change in total revenue, this is dictated by the change in rate of sales the company has. In order for GM to maximize their profit they will have to take the total revenue minus the total cost to achieve their total profit. Future more the profit maximization will occur at the period of time when the total cost and the total revenue is at the largest point away from each other (Agarwal, 2019).

            For example, if GM laid out one specific item on a spreadsheet, where the company labels their output (0-5), then variable cost, fixed cost, total cost, and marginal cost. In order to see a profit, they might have to reach output number 5 in order to see a profit. In fact when they bring in to account the other outlaying factors of their item, they might be making a profit at output number 2 or 3 because at output 5 this is where they were maximizing profit knowing at Output 2 and 3 the profit was minimal but not maximin (Clifford, 2014). For as long as GM has been around, it’s important for them to be able to increase their output. With increased output they will see an increase in their revenue over the cost associated with production (Principles of Management Economics, n.d.). It’s also important for GM to keep in mind the importance of quality of their product and services, if their product and service quality diminish then their profit will be affected in a negative way affecting the maximization profit curve.

4. Various measures of cost

Douglas Fur is a small manufacturer of fake-fur boots in Chicago. The following table shows the company’s total cost of production at various production quantities.

Fill in the remaining cells of the following table.

On the following graph, plot Douglas Fur’s average total cost (ATC) curve using the green points (triangle symbol). Next, plot its average variable cost (AVC) curve using the purple points (diamond symbol). Finally, plot its marginal cost (MC) curve using the orange points (square symbol). (Hint: For ATC and AVC, plot the points on the integer; for example, the ATC of producing one pair of boots is $155, so you should start your ATC curve by placing a green point at (1, 155). For MC, plot the points between the integers: For example, the MC of increasing production from zero to one pair of boots is $95, so you should start your MC curve by placing an orange square at (0.5, 95).)

Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically.

ATCAVCMC01234562001751501251007550250COSTS (Dollars per pair)QUANTITY (Pairs of boots)

1. Statement of Cost of Goods Manufactured for a Manufacturing Company

   Cost data for Johnstone Manufacturing Company for the month ended March 31 are as follows:

   Inventories	March 1		March 31
   Materials	$229,750		$204,480
   Work in process	158,530		141,090
   Finished goods	119,470		139,050

   Direct labor		$413,550
   Materials purchased during March		441,120
   Factory overhead incurred during March:
   	Indirect labor	44,110
   	Machinery depreciation	26,650
   	Heat, light, and power	9,190
   	Supplies	7,350
   	Property taxes	6,430
   	Miscellaneous costs	11,950

   a. Prepare a cost of goods manufactured statement for March.

   Johnstone Manufacturing Company
   Statement of Cost of Goods Manufactured
   For the Month Ended March 31
   			$
   Direct materials:
   	$
   	$
   		$
   Factory overhead:
   	$
   Total factory overhead
   Total manufacturing costs incurred during March
   Total manufacturing costs			$
   Cost of goods manufactured			$

   b. Determine the cost of goods sold for March.
   $

Question #2

Cost Flow Relationships

The following information is available for the first month of operations of Bahadir Company, a manufacturer of mechanical pencils:

Using the above information, determine the following missing amounts:

Direct Materials Purchases Budget: Direct Labor Budget

Crescent Company produces stuffed toy animals; one of these is “Arabeau the Cow.” Each Arabeau takes 0.20 yard of fabric (white with irregular black splotches) and 10 ounces of polyfiberfill. Fabric costs $3.40 per yard and polyfiberfill is $0.05 per ounce. Crescent has budgeted production of Arabeaus for the next four months as follows:

Inventory policy requires that sufficient fabric be in ending monthly inventory to satisfy 20 percent of the following month’s production needs and sufficient polyfiberfill be in inventory to satisfy 40 percent of the following month’s production needs. Inventory of fabric and polyfiberfill at the beginning of October equals exactly the amount needed to satisfy the inventory policy.

Each Arabeau produced requires (on average) 0.10 direct labor hour. The average cost of direct labor is $15 per hour.

Required:

1. Prepare a direct materials purchases budget of fabric for the last quarter of the year showing purchases in units and in dollars for each month and for the quarter in total. Round your answers to the nearest cent, if required.

2. Prepare a direct materials purchases budget of polyfiberfill for the last quarter of the year showing purchases in units and in dollars for each month and for the quarter in total. Round your answers to the nearest cent, if required.

3. Prepare a direct labor budget for the last quarter of the year showing the hours needed and the direct labor cost for each month and for the quarter in total. Round your answers to the nearest cent, if required.