Ant MOD (Esce File Home Draw Page Layout Formulas Data Review View Help XO Copy Cal -11 wapid -AAE A EMOCerter 5 % % 22. Concia fomu Fomingo Number Clipboard Algen FIS A D E G 5 Situation flock & Strollha manufacturer of infant and toddler strollers. They manufacture many different models, ranging from the small umbrella strollers to the infant seat/stroller combination to the double stroller Rock & Stroll has many capabilities and typically makes most components themselves, however, they have recently received an offer from Cooper Seating Specialists to make and sell 10.000 specialty stroller seats to R&S at S4 per unit. As the accounting intern, the Controller has asked you to evaluate this offer and make a recommendation as to whether or 6 not the company should continue to make their own seats or buy them from Cooper 2 You have investigated the costs and have learned the following based on a typical production run of 10,000 units! 69 10 Per Unit 10,000 Units Direct Materials $ 1.50 $ 15,000 12 Direct Labor $ 0.85 $ 15 Variable Overhead $ 0.75s 7,500 14 Supervisor's Salary $ 0.65$ 6,500 15 Depreciation of Special Equipment $ 0.455 4,500 16 Allocated General Overhead $ 0.82S 8,200 12 Total Cost S 5.02 $ 50,200 18 19. Additional information 20 a Rock & Stroll has invested in special equipment to make seats and will continue to incur depreciation costs. 1. General Overhead expenses are allocated to different areas of production by manufacturing space. The square footage associated with seat manufacturing will remain on the books 21 whether or not production occurs. 22. If the purchase is made, the supervisor's role will be eliminated. 8,500 24 Instruction 235 1. Make a recommendation to the Controller should Rock & Stroll continue to make seats intamally or should they buy seats from Cooper? Why? Support your answer with a computation of lustration to support that recommendation. What is the net impact on the company? (Note: Ample space is included below. Another question, #2, follows.) (15 26 points total Sheet1 CH Type here to search o UP C Auto on Attempt MSD (0 - Excel Insert Draw Page Layout Formula Data Review View Help Home Xon la copy - - 11 19 - BIU. $ % De format Condition om Yom les Art Number F16 A C D G H 44 Situation Tastic, a not-for-profit daycare agency, would like to make a special order purchase of Sounits of your B-12 stroller, which normally has a retail price of $199.99 each. They have requested these units at a price of $150. In addition, they have requested a special insignia on each unit to indicate that they belong to the child care centers. Each insignia will cost an additional $1.85 per unit. You have extra capacity available, and the order would have no effect on the company's regular sales. The company's Controller has once again looked to you to 46 make a recommendation 47 4 You have pulled the cost card on this particular dem and have found the following unit costs: 49 50 Per Unit 51 Direct Materials S 50.00 Direct Labor $ 75.00 53 Manufacturing Overhead s 32.00 54 Total Cost Per Unit S 157.00 55 Note: The variable portion of the manufacturing overhead is $14.00, the remainder is fixed 57 Instructions 5 2. Make a recommendation to the Controller: should Rock & Stroll escept the special order or respectfully decline the order? Why? Support your answer with a computation or 59 Mustration to support that recommendation. What is the net impact on the company? (15 points total] 0 61 Answer including numerical argument with supporting calculations or analysis shown below: Sheet1 Type here to search O ic 6
