1. TC Company makes several printing works using two machines (X and Y). Data on the two machines for June 2010 are as follows: X Y Direct material 10 15 Time required for each unit (TR) 2 3 Expected volume during the month (EV) 2,000 500 Expected labor cost per hour 50 Budgeted overhead costs 660,000 Determine total cost of machine Y 1. $350 2. $525 3. $550 4. $580 2. XY Company sells its unique product at $30.00 Variable costs per unit are $20.00 Total fixed sales salaries per month $40,000.00 Other fixed costs per month $60,000.00 Assume that the company wants to change the sales salaries as follows: Total fixed sales salaries per month 25,000 Sales commission of 10% Find at what sale-level is the company indifferent between the two alternatives 3. Tany Corporation is a small table manufacturing company operating in the north of Puerto Rico. Managers estimate the following costs per unit (one table) Direct material (DM) $6.00 Direct labor (DL) $4.00 Variable manufacturing overhead (VMO) $3.00 Variable administrative expenses (VAE) $1.00 The estimated contribution margin is 30% Monthly fixed costs are Manufacturing $10,000.00 Administrative $5,000.00 Total unit sold during last month is 2560, what is the total operating income for the last month. a. $350 b. $358 c. $360 d. $400 4. XYZ Company has several products lines, all related to sports. The managers want you to determine whether they can save from dropping product X. If they drop this product they could recover the investment in receivable and inventory related to the line and pay off debt The related data to product X is as follows: Product X Sales $180,000 Variable costs 150,000 Avoidable fixed costs 20,000 Investments that could be recovered from dropping product X $100,000 Total debt related to investment $100,000 Annual interest rate related to debt 10% Determine whether the company should drop the product X a. yes, because the savings from dropping X is greater than Keeping it b. No, the Product generates 20,000 as net income so we should not drop it c. We are indifferent to drop or not the Product X d. We need more financial information to decide such as contribution margin per unit 5. Tany Company operates a manufacturing facilities. The following information pertains to its normal production: Maximum manufacturing capacity per month is 20,000 units. Total variable costs for maximum capacity are $160,000. Actual production is 15,000 units. Total fixed costs per month are $400,000. Tany received a special offer from a customer of 4,000 units. Determine the price that makes Tany indifferent to reject or not this special offer. a. $28 b. $20 c. $12 d. $8 6. Sales (in units) 60,000 Selling price per unit 25 Manufacturing costs per unit: Materials 5 Direct labor 4 Overhead Variable 4 Fixed 6 Total 19 Gross margin 6 Selling and admin. Expenses per unit 2 Operating income 4 A company in a foreign market offer to buy and the offer specifies the following data units to be sold 10,000 price per unit 13 Should the company sell this special order