any help? direction? this is for Accounting

Assignment (ACCT 6202)

(Total points = 55 points)

1. The Rocky Mountain Catering Company specializes in preparing Mexican dinners that if freezes and ships to restaurants in the Denver area. When a diner orders an item, the restaurant heats and serves it. The budget data for the current year are given in the table below:

Assignment (ACCT 6202) (Total points = 55 points) 1) The Rocky Mountain Catering Company specializes in preparing Mexican dinners that if freezes and ships to restaurants in the Denver area. When a diner orders an item, the restaurant heats and serves it. The budget data for the current year are given in the table below: Product Selling price to restaurants Variable cost Number of units to be sold Chicken Tacos $5 $3 250,000 Beef Enchiladas $7 $4 125,000 The company prepares the items in the same kitchens, delivers them in the same trucks, and so forth. Therefore, decisions about the individual products do not affect the fixed costs of $735,000 per year. a. Compute the planned net income for the current year. b. Compute the break-even point in units, assuming that the company maintains its planned sales mix. Use the sales mix in terms of planned sales units (i.e. use the Weighted Average Contribution Margin method). c. Compute the break-even point in sales dollars, assuming that the company maintains its planned sales mix. Use the sales mix in terms of planned sales dollars (i.e. use the Weighted Contribution Margin Ratio method). Verify that your answer is consistent with the answer in (b). d. Suppose the company sells 78,750 units of enchiladas and 236,250 units of tacos, for a total of 315,000 units. Compute the net income. Compute the new breakeven point with this new sales mix. What can you conclude when you compare with results in (b)? (2 + 4 + 4 + 5 = 15 points) 2) Savino Company has assembled the following data pertaining to its two products. Direct material cost per unit Direct labor cost per unit Manufacturing overhead cost applied @ $16 per machine hour (per unit of product) Annual demand (in units) Thermometer Barometer $11 $6 $9 $4 $32 $16 28,000 20,000 Past experience has shown that the fixed manufacturing overhead component included in the cost per machine hour averages $10. The selling price of thermometer and barometer is $60 and $35 respectively. (2 + 5 + 7 + 6 = 20 points) a) Rank these two products according to profitability using (i) Contribution margin per unit as the profitability metric and (ii) Contribution Margin Ratio as the profitability metric. b) If 50,000 machine hours are available for Savino for the manufacture of thermometers and barometers, and Savino wants to follow a strategy to maximize current profits, how many units of each product should the firm manufacture? How many units of each product would Savino leave behind in the market for the competitors to pickup because of the constraint on machine capacity? How much profit would the company make under this production plan? (Hint: Machine hours required for each product is not given directly to you but you should be able to look at the data and infer a way around) c) Suppose Savino has a policy of meeting the entire market demand by outsourcing even if it is unable to produce enough units in house. Also, assume that Savino can purchase thermometers and barometers from a trusted supplier at a price of $50 and $23 per unit respectively. Savino has a policy of first utilizing 100% of capacity in house before it considers outsourcing options. Under these circumstances, recommend a profit maximizing optimal production plan (i.e. how many units of thermometers and barometers will be produced in house?). Also, how many units of thermometers and barometers will be outsourced? What is the amount of profit that would be generated now based on the production and outsourcing plan? d) With all other things remaining the same, if Savino is able to reduce the direct material cost for a barometer from $6 to $3 per unit, how will your answer change for part (c)? Justify your answer with relevant calculations. 3) Cocoa Confections provides you with the following information for the most recent year of operations. The firm informs you that manufacturing overhead equals 150% of direct labor costs. Direct materials beginning inventory Direct materials ending inventory Beginning WIP inventory Ending WIP inventory Beginning FG inventory Ending FG inventory Direct materials issued to production Total manufacturing costs charged to production = $90,000 $75,000 $80,000 $100,000 $125,000 $175,000 $200,000 $900,000 (Total manufacturing costs charged to production = direct materials issued to production + direct labor cost + manufacturing overhead). Revenues $1,250,000 Selling and Administrative costs $265,000 Required: Calculate a. The cost of direct materials purchased. b. Direct labor costs. c. Manufacturing overhead costs. d. Prime costs. e. Conversion costs. f. Cost of goods manufactured. g. Cost of goods sold. (10 points) 4) Usman anticipates having some spare time during the coming summer and is considering four options. To determine the best option, he estimates the revenues and the costs associate with each option: Option 1 Revenue: $2,500, cost: $700; Option 2Revenue: $5,000, cost: $3,800; Option 3Revenue: $1,700, cost $250; Option 4(charity work)Revenue $0, cost $400. Required: a. Based only on estimated revenues and costs, what is the value of each of the four options? b. Based only on estimated revenues and costs, what is the opportunity cost of each of the four options? c. Based only on estimated revenues and costs, identify the option for which the value is greater than the opportunity cost. d. What benefit is Usman implicitly attaching to doing charity work if he chooses Option 4? (10 points)