[15] Four Seasons Ltd has in stock 16,100 litres of white wine that was bought five years ago for 5.75 per litre. The wine was purchased to use in a product line that has now been discontinued. The wine can be sold as it is for scrap at 3.91 per litre. An alternative would be to use it in one of the company's current frozen products, "Pasta e Vongole" [Pasta and Clams), which requires 1 litre of a different wine, available for 7.60 per litre. The white wine can be treated at a cost of 0.77 per litre so that it can be used as a substitute in the production of "Pasta e Vongole". However, after modification, 2 litres of white wine are required for every package of product. Four Seasons Ltd has received a request from a restaurant that could use the white wine in its production process. What is the minimum acceptable selling price of white wine that Four Seasons Ltd will have to charge? a) 3.60 b) 0.88 c) 3.03 d) 4.57 3 Marks [16] Which one of the following is used by the production department supervisor to request the materials for production? a) Purchase order b) Material requisition c) Product job cost schedule d) Job cost sheet 1 Mark 1 [17] Marinara Hospital currently runs on a very old patient registration and discharge system. The system, based on special software, can be either updated or replaced with a new one. The following data have been gathered concerning these two alternatives: Present System Update 100,000 New System 150,000 90,000 80,000 30,000 20.000 Purchase cost when new Accumulated depreciation Update cost today Annual cash operating costs Disposal value today Disposal value in five years Working capital required 10,000 2,000 15,000 50,000 Marinara Hospital uses a 12% discount rate and a total cost approach. Both alternatives are expected to have a useful life of five years. Cont'd... Page 6 of 13 ACC1003 / May 2018 The Net Present Value of the Present System Update' alternative is: a) (259,426) a b) (269,426) c) (228,232) d) (230,000) 5 Marks [18] Reginella plc, a manufacturer of concrete, produces four grades of concrete for 500,000 cubic yards at a joint cost of 2,000,000. Information for each grade is as follows: Grade Cubic Yards Sales Value A 75,000 375,000 B 200,000 1,200,000 100,000 700,000 125,000 850,000 What is the gross profit of Grade D concrete, if the constant gross margin percentage method is used? a) 306,000 b) 1,125,000 c) 544,000 d) 900,000 5 Marks Total 40 Marks