1. The President of DM Industries shook his head. ?I just don?t understand what happened last month. Sales were up but we are showing a lower income than we expected. I know the purchasing department got a good price on our raw materials and Human Resources tells me that they hired more qualified people than we really needed. I need someone to explain to me what happened. Here are some of the numbers I got from accounting?. Actual BudgetSales (Units)8,750 8,000Sales$1,147,500 $1,024,000Direct Materials$27,675 $24,000Direct Labour$872,813 $784,000V MOH (based on Machine Hours)$12,200 $10,800Variable Selling and Admin$17,500 $16,000Fixed Selling and Admin$158,000 $150,000 According to the budget, each unit produced should take 2 kilograms of direct materials and 3.5 hours of direct labour. Overhead gets applied at a rate of $2.70 per machine hour and we should be able to produce two units per machine hour. DM Industries was actually able to purchase Direct Material at $1.35 per kilogram and paid $28.50 per hour for labour. According to the machine logs, 4,450 Machine Hours were used. Required:Write a memo to the president of DM industries detailing the cause(s) of the results. Your memo should provide details of any variances and should comment on whether the decisions to purchase cheaper materials and more expensive labour were good ones. (4 points) 2. Greencorn Stores (GS) is a retailer in Nova Scotia operating three locations; Windsor, Truro, and Pictou. The most recent monthly income statement for GS is given below: WindsorTruroPictouTotalSales$1,300,000$800,000$750,000$2,850,000Variable Expense850,000625,000610,000$2,085,000Contribution Margin450,000175,000140,000765,000Fixed Expenses275,000200,000145,000620,000Operating Income (Loss)$175,000($25,000)($5,000)$145,000 Due to the losses reported, GS is considering closing either the Truro or Pictou locations. If Truro were closed, 20% of the fixed expenses allocated to it would continue to be incurred. Also, the closing of Truro would result in a 5% decrease in sales in both Windsor and Pictou. If Pictou were closed, 25% of the fixed expenses allocated to it would continue to be incurred. Closing Pictou would not have any impact on sales at the other two stores but would allow GS lay off one of its head-office personnel with an annual cost of $32,000.Required:Write a memo advising if GS should close either or both stores. Your memo must demonstrate the overall increase or decrease in the operating income of GS based on your recommendation. (4 points) 3. Greencorn Plumbing Supply (GPS) manufactures sinks. Each year GPS makes 4,000 drain units for their sinks. The unit product cost of the drain is computed as follows:Direct Materials$ 40.00Direct Labour$ 9.50Variable Manufacturing Overhead$ 8.00Fixed Manufacturing Overhead$ 20.00Unit Product Cost$ 73.00An outside supplier has offered to sell GPS 4,000 drain units for $ 65.00 a unit. If GPS decided to accept the offer, it would avoid $30,000 in fixed manufacturing overhead costs. Assume that Direct Materials and Direct Labour are variable.Required:Assume GPS has no alternative use for the space currently used to make the drain units. Write a memo advising if GPS should accept the offer (2 points)

Eastlink '6 1:30 AM >B 75% CM fl smu.brightspacecom l. The President of DM Industries shook his head. "I just don't understand what happened last month. Sales were up but we are showing a lower income than we expected. I know the purchasing department got a good price on our raw materials and Human Resources tells me that they hired more qualified people than we really needed. I need someone to explain to me what happened. Here are some of the numbers I got from accounfingh Actual 8.750 $1,147,500 Direct Materials $27,675 irect Labour $87Z,813 V MOH (based on Machine Hours) $12.200 Variable Selling and Admin $17.500 Fixed Selling and Admin $158.000 Budget 8,00 $1,024,00 $24,00 $784,00 $10.80 $16.00 $150,000 Sales (Units) ales 0 - - - According to the budget, each unit produced should take 2 kilograms of direct materials and 3.5 hours of direct labour. Overhead gets applied ata rate of $2.70 per machine hour and we should be able to produce two units per machine hour. DM Industries was actually able to purchase Direct Material at $1.35 per kilogram and paid $28.50 per hour for labour. According to the machine logs, 4,450 Machine Hours were used. Required: Write a memo to the president of DM industries detailing the cause(s) of the results. Your memo should provide details of any variances and should comment on whether the decisions to purchase cheaper materials and more expensive labour were good ones. (4 points) 2. Greencorn Stores (GS) is a retailer in Nova Scotia operating three locations; Windsor, Truro, and Pictou. The most recent monthly income statement for GS is given below: -mnm rota s2.sso.ooo szoaaooo reaoo moe Operating Income (Loss) $175.@QL5&,000 figflg 5145M CO OO O O O 0 Due to the losses reported, GS is considering closing either the Truro or Pictou locations. If Truro were closed, 20% of the fixed expenses allocated to it would continue to be incurred. Also, the closing of Truro would result in a 5% decrease in sales in both Windsor and Pictou. Eastlink '6 1:30 AM >B 75% CM fl smu.brightspacecom 2. Greencorn Stores (GS) is a retailer in Nova Scotia operating three locations; Windsor, Truro, and Pictou. The most recent monthly income statement for OS is given below: -m Truro rota $1300,000 S800,00 5750,00 2,850.000 Variable Expense 850.000 625.00 610.00 {2.085.000 O O U) 0 O U) Contribution Margin 450.000 175.000 140.000 765.000 Fixed Expenses 275,000 200,000 145,000 620,000 Operating Income (Loss) $175.@Q LSDOO figflg 5145M Due to the losses reported, GS is considering closing either the Truro or Pictou locations. If Truro were closed, 20% of the fixed expenses allocated to it would continue to be incurred. Also, the closing of Truro would result in a 5% decrease in sales in both Windsor and Pictou. If Pictou were closed, 25% of the fixed expenses allocated to it would continue to be incurred. Closing Pictou would not have any impact on sales at the other two stores but would allow GS lay off one of its head-office personnel with an annual cost of $32,000. Required: Write a memo advising if GS should close either or both stores. Your memo must demonstrate the overall increase or decrease in the operating income of GS based on your recommendation. (4 points) 3. Greencorn Plumbing Supply (GPS) manufactures sinks. Each year GPS makes 4,000 drain units for their sinks. The unit product cost of the drain is computed as follows: Direct Materials $ 40.00 Direct Labour $ 9.50 Variable Manufacturing Overhead $ 8.00 Fixed Manufacturing Overhead $ 20.00 Unit Product Cost $ 73.00 An outside supplier has offered to sell GPS 4,000 drain units for $ 65.00 a unit. If GPS decided to accept the offer, it would avoid $30,000 in fixed manufacturing overhead costs. Assume that Direct Materials and Direct Labour are variable. Required: Assume GPS has no alternative use for the space currently used to make the drain units. Write a memo advising if GPS should accept the offer (2 points)