A.

Chenango Industries uses 11 units of part JR63 each month in the production of radar equipment. The cost of manufacturing one unit ofJR63 is the following: Direct material $ 3,566 Material handling (26% of direct-material cost) 766 Direct labor 38,666 Manufacturing overhead (158% of direct labor) 57,666 Total manufacturing cost $ 99,266 Material handling represents the direct variable costs of the Receiving Department that are applied to direct materials and purchased components on the basis of their cost. This is a separate charge in addition to manufacturing overhead. Chenango Industries' annual manufacturing overhead budget is onethird variable and twothirds xed. Scott Supply, one of Chenango Industries' reliable vendors, has offered to supply part number JR63 at a unit price of $63,000. Required: 1. If Chenango Industries purchases the JR63 units from Scott, the capacity Chenango Industries used to manufacture these parts would be idle. Should Chenango Industries decide to purchase the parts from Scott, the unit cost of JR63 would increase (or decrease) by what amount? 2. Assume Chenango Industries is able to rent out all its idle capacity for $93,000 per month. If Chenango Industries decides to purchase the 11 units from Scott Supply. Chenango's monthly cost for JR63 would increase (or decrease) by what amount? 3. Assume that Chenango Industries does not wish to commit to a rental agreement but could use its idle capacity to manufacture another product that would contribute $177,000 per month. If Chenango's management elects to manufacture JR63 in order to maintain quality control, what is the net amount of Chenango's cost from using the space to manufacture part JR63? Required 1 Required 2 Required 3 Assume that Chenango Industries does not wish to commit to a rental agreement but could use its idle capacity to manufacture another product that would contribute $177,000 per month. If Chenango's management elects to manufacture JR63 in order to maintain quality control, what is the net amount of Chenango's cost from using the space to manufacture part JR63? Show less A Winner's Circle, lnc., manufactures medals for winners of athletic events and other contests. Its manufacturing plant has the capacity to produce 2,500 medals each month. Current monthly production is 1,875 medals. The company normally charges $515 per medal. Variable costs and fixed costs for the current activity level of 75 percent of capacity are as follows: Production Costs Variable costs: Manufacturing: Direct labor $ 262JSGB Direct material 196J8?5 Marketing 149,625 Total variable costs $ GGGJGGB Fixed costs: Manufacturing $ 2871158 Marketing IBBJBSB Total fixed costs $ 337JSGB Total costs $ QBTJSGB Variable cost per unit $ 329 Fixed cost per unit 139 Average unit cost $ 599 Winner's Circle hasjust received a special one-time order for 625 medals at $290 per medal. For this particular order. no variable marketing costs will be incurred. Cathy Donato, a management accountant with Winner's Circle, has been assigned the task of analyzing this order and recommending whether the company should accept or reject it. After examining the costs, Donato suggested to her supervisor, Gerard LePenn, who is the controller, that they request competitive bids from vendors for the raw material as the current quote seems high. LePenn insisted that the prices are in line with other vendors and told her that she was not to discuss her observations with anyone else. Donato later discovered that LePenn is a brotherin-lavur of the owner of the current rawmaterial supply vendor. Required: 1. Which of the following costs will be relevant to Cathy Donato's analysis of the special order being considered by Winner's Circle, Inc.? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Fixed marketing cost. Variable costs of labor and material. Fixed manufacturing costs. Variable marketing cost.Complete this question by entering your answers in the tabs below. Req 2A Req 2B Compute both the new average unit cost and the incremental unit cost for the special order. (Do not round intermediate calculations. Round your answers to 2 decimal places.) New average unit cost Incremental unit costReq 2A Req 2B Should Winner's Circle, Inc. accept the special order? Should management accept the special order? 3. Identify the considerations that Donato should include in her analysis of the special order. (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) The future customer potential of the buyer of the special order, generating additional revenues. Acceptance of the special order could result in higher bonuses for the department's staff. Possible problems with other customers who pressure the company for similar treatment. i.........4. Which of the following statements are true regarding Donato's possible response to the ethical conflict arising out of the controller's insistence that the company avoid competitive bidding? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) El She should never go to the next-higher managerial level as this would mean bypassing of levels of authority and create further damage to her relations with the manager. El Ethical conicts are a part of everyday office life and is no cause for resigning. El She should follow the company's established policies on such matters. El The ethical requirement of competence would imply that Donato should try and resolve the conict herself instead of discussing with other advisors. El If the ethical conflict still exists after exhausting all avenues of internal review, she may have to resign from the company and submit an informative memorandum to the board of directors. El Donato should clarify relevant concepts by condential discussions with an objective advisor to obtain an understanding of possible courses of action