a Patti Lee, a recent graduate of a Bachelor of Business Program, is evaluating the operating performance of Popo Inc., which has six divisions. The Erie division is incurring a loss, while the other five divisions are all reporting healthy profits. The following information has been made available to Patti Lee. Erie Division POPO Inc. The other five divisions Sales 596,200 76,470 $1,664,200 978,520 TOTAL $1,760,400 1,054,990 Cost of goods sold 685,680 Gross profit Operating expenses 19,730 43,600 705,410 571,540 527,940 Net Income $(23,870) $157,740 $133,870 In the Erie Division, the cost of goods sold is $73,000 variable and $3,470 fixed, and operating expenses are $11,000 variable and $32,600 fixed. If the Erie division is closed, $10,000 of its total fixed costs would be avoidable. Required: You must show all your calculations in order to get marks. If you provide the answer only you will not receive any marks. 1) Prepare a contribution type income statement for the Erie Division 2) Prepare an analysis to determine the impact on total profits if the Erie division is closed (show all your calculations) 3) Should the Erie Division be closed? FOOD Industries employs a standard cost system. FOOD has established the following PER UNIT standards for the prime costs of its product XYZ frozen desserts line: Standard Quantity Standard Price/ Rate Standard Cost of DM/DL per unit per KG/DLH Direct Materials $1.80 per KG $14.40 Direct Labour 0.25 DLH (15 minutes) $8.00 per DLH $2.00 Total Cost 16.40 8 kg During November, the company purchased 142,500 KG of direct materials at a total cost of $285,000. The total factory wages for November were $37,800. The company manufactured 19,000 units of XYZ during November using 142,500 kg of direct materials and 5,000 direct labour hours. Required: SHOW ALL CALCULATIONS Compute the direct materials a) flexible budget, b) price and c) quantity variance for November 2. Compute the direct labour a) flexible budget, b) rate and c) efficiency variance for November 1. Pat has just graduated university and is thinking about opening "Surf Shop" to sell surfboards. The surfboards are manufactured by a local company and the cost to purchase each surfboard is $300. Pat estimates that each surfboard can sell for $400.00. Other costs Include rent for the shop of $26,000 annually and advertising of $16,000 annually. Pat plans to hire one salesperson who will be paid a 10% sales commission for every surfboard that is sold. Required: You must show all your calculations in order to get marks. If you provide the answer only you will not receive any marks. 1. What is the contribution margin per unit in $$. 2 What is the contribution margin ratio? 3. What is the break-even point in units? 4. What is the break-even point in sales dollars? 5 How many units need to be sold to earn $ 90,000? 6. of Surf Shop is operating at 10 units below break-even what is the total loss? 7 If Surf Shop sells 8,000 surfboards what is the expected profit? Prosports manufactures basketballs for professional basketball associations. It has budgeted the following sales and expenses for 2022 assuming the company operates at 80% capacity. Full capacity is 112,500 units. Amount Per unit 50.00 4,500,000 3,150,000 35.00 Sales ( 90,000 units - all REGULAR SALES) Cost of goods sold Selling and administrative expenses Net income 360,000 4.00 990,000 11.00 includes variable and fixed costs Fixed costs for the period were $1,080,000 for costs of goods sold and $162,000 for selling and administrative expenses. Pro Sports receives a special order for basketballs from the European Basketball Association. Accepting the special order would increase variable selling and administrative expenses by $ 1.25 per unit because of shipping costs but would not increase fixed costs. Required: (show all calculations) a) Convert the above income statement, showing a $990,000 profit, to a contribution type income statement (6 marks). b) Compute the contribution margin per unit (for regular sales)(3 marks). c) What is ProSport's excess capacity? (2 marks) d) Assume the special order is for 15,000 units at $30 per unit and the company is operating at 80% capacity. What is the minimum price Pro Sports should charge, in total and per unit, for this special order? (3 marks) If Pro Sports accepts this special order of 15,000 units at $30 per unit by how much will net income increase or decrease? (3 marks) Should Pro Sports accept the special order? (1 mark) e) Assume the special order is for 40,000 units at $30 per unit and the company is operating at 80% capacity. L What is the minimum price Pro Sports should charge, in total and per unit, for this special order? (hint: compute the total price first and then divide by the number of units) (5 marks) il Should Pro Sports accept the special order? ( 1 mark) 1. il