1.

Exercise 23-5 Sell or process further L0 P2 Varto Company has 8,400 units of its sole product in inventory that it produced last year at a cost of $22 each. This year's model is superior to last year's, and the 8,400 units cannot be sold at last year's regular selling price of $47 each. Varto has two alternatives for these items: (1) they can be sold to a wholesaler for $10 each or (2) they can be processed further at a cost of $175,400 and then sold for $30 each. Should Varto sell the products as is or process further and then sell them? Revenue if processed further Revenue if sold as is Incremental net income(Loss) The company should: Exercise 23-8 Income analysis of eliminating departments L0 P4 Marinette Company makes several products, including canoes. The company has been experiencing losses from its canoe segment and is considering dropping that product line. The following information is available regarding its canoe segment. MARINETTE COMPANY Income StatementCanoe Segment Sales $2,166,666 Variable costs Direct materials $ 476,666 Direct labor 526,666 Variable overhead 326,666 Variable selling and administrative 216,666 Total variable costs 1,526,666 Contribution margin 586,666 Fixed costs Direct 395,666 Indirect 326,666 Total fixed costs 715,666 Net income $ (135,666) 1. If canoes are discontinued, calculate the net income lost or gained. 2. Should management discontinue the manufacturing of canoes? Complete this question by entering your answers In the tabs below. Required 1 Required 2 If canoes are discontinued, calculate the net income lost or gained. (Leave no cells blank. Enter zeros where appropriate.) Sales __ NMMOSS, Required 2 > 1. If canoes are discontinued, calculate the net income lost or gained. 2. Should management discontinue the manufacturing of canoes? Complete this questlon by entering your answers In the tabs below. Required 1 Required 2 Should management discontinue the manufacturing of canoes? Should management discontinue the manufacturing of canoes? _ ( Required 1 [The following information applies to the questions displayed below. ] Suresh Co. expects its ve departments to yield the following income for next year. Dept. M Dept. N Dept. 0 Dept. P Dept. T Total Sales $75,000 $ 41,000 $63,000 $51,000 $ 36,000 $271,000 Expenses Avoidable 13,800 41,200 21,000 18,000 45,000 139,000 Unavoidable 55,000 17,400 5,000 42,000 15,400 134,800 Total expenses 68,800 58,600 26,000 60,000 60,400 273,300 Net income (loss) $ 6,200 $(17,600) $42,000 $l9,000) $(24,400) $ (2,800) Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios. Exercise 23-9 Part1 (1) Management eliminates departments with expected net losses. [The following information applies to the questions displayed below. J Suresh Co. expects its ve departments to yield the following income for next year. Dept. M Dept. N Dept. 0 Dept. P Dept. T Total Sales $75,000 $ 41,000 $68,000 $51,000 $ 36,000 $271,000 Expenses Avoidable 13,800 41,200 21,000 18,000 45,000 139,000 Unavoidable 55,000 17,400 5,000 42,000 15,400 134,800 Total expenses 63,800 53,600 26,000 60,000 60,400 273,800 Net income (1055) $ 5,200 $(17,600) $42,000 \"9.000) $04,400) $ (2.300) Recompute and prepare the departmental income statements (including a combined total column) for the company under each of the following separate scenarios. Exercise 23-9 Part 2 (2) Management eliminates departments with sales dollars that are less than avoidable expenses. Saks Net income (loss) Exercise 23-1 Make or buy LO P1 Gilberto Company currently manufactures 66,000 units per year of one of its crucial parts. Variable costs are $2.00 per unit, fixed costs related to making this part are $76,000 per year, and allocated fixed costs are $63,000 per year. Allocated fixed costs are unavoidable whether the company makes or buys the part. Gilberto is considering buying the part from a supplier for a quoted price of $3.30 per unit guaranteed for a three-year period. Calculate the total incremental cost of making 66,000 and buying 66,000 units. Should the company continue to manufacture the part, or should it buy the part from the outside supplier? Complete this question by entering your answers in the tabs below. Costs to Make Costs to Buy Outside Supplier Calculate the total incremental cost of making 66,000 units. (Round cost per unit answers to 2 decimal places.) Incremental Costs to Make Relevant Amount per Relevant Fixed Total Relevant Unit Costs Costs Variable cost per unit Fixed manufacturing costs Total incremental cost to make Exercise 23-1 Make or buy LO P1 Gilberto Company currently manufactures 66,000 units per year of one of its crucial parts. Variable costs are $2.00 per unit, xed costs related to making this part are $76,000 per year, and allocated fixed costs are $63,000 per year. Allocated fixed costs are unavoidable whether the company makes or buys the part. Gilberto is considering buying the part from a supplier for a quoted price of $3.30 per unit guaranteed for a three-year period. Calculate the total incremental cost of making 66,000 and buying 66,000 units. Should the company continue to manufacture the part, or should it buy the part from the outside supplier? Complete this question by entering your answers In the tabs below. Costs to Make Costs to Buy 3:33;; Should the company continue to manufacture the part, or should it buy the part from the outside supplier? Should Gilberto make the part or purchase it from the outside supplier? l | Exercise 23-2 Make or buy LO P1 Gelb Company currently manufactures 53,000 units per year of a key component for its manufacturing process. Variable costs are $5.15 per unit, fixed costs related to making this component are $71,000 per year, and allocated fixed costs are $81,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.90 per unit. Calculate the total incremental cost of making 53,000 units and buying 53,000 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier? Complete thls questlon by enterlng your answers In the tabs below. Outside Costs to Make Costs to Buy Supplier Calculate the total incremental cost of making 53,000 units. (Round "variable cost per unit" answers to 2 decimal places.) Variable cost per unit Fixed manufacturing costs Total incremental cost to make Costs to Buy > Exercise 23-2 Make or buy LO P1 6er Company currently manufactures 53,000 units per year of a key component for its manufacturing process. Variable costs are $5.15 per unit, fixed costs related to making this component are $71,000 per year, and allocated fixed costs are $81,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.90 per unit. Calculate the total incremental cost of making 53,000 units and buying 53,000 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier? Complete thls questlon by enterlng your answers In the tabs below. Outside Costs to Make Costs to Buy Supplier Calculate the total incremental cost of buying 53,000 units. (Round "purchase price per unit" answers to 2 decimal places.) Purchase price per unit _ - _ Total incremental cost to buy _ Exercise 23-2 Make or buy LO P1 6er Company currently manufactures 53,000 units per year of a key component for its manufacturing process. Variable costs are $5.15 per unit, fixed costs related to making this component are $71,000 per year, and allocated fixed costs are $81,500 per year. The allocated fixed costs are unavoidable whether the company makes or buys this component. The company is considering buying this component from a supplier for $3.90 per unit. Calculate the total incremental cost of making 53,000 units and buying 53,000 units. Should it continue to manufacture the component, or should it buy this component from the outside supplier? Complete this question by enterlng your answers In the tabs below. Costs to Make Costs to Buy 50:;::?; Should it continue to manufacture the component, or should it buy this component from the outside supplier? Should Gelb make the part or purchase it from the outside supplier? _