Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Armidale Cakes manufactures a product that has two parts, A and B. It is currently considering two alternative proposals for 2019 related to these parts.
Armidale Cakes manufactures a product that has two parts, A and B. It is currently considering two alternative proposals for 2019 related to these parts. Proposal 1 is for buying Part A. This would free up some of the plant space for the manufacture of more of Part B and assembly of the final product. The product Vice CEO believes the additional production of the final product can be sold at the current market price. No other changes in manufacturing would be needed. Proposal 2 is for buying new equipment for the production of Part B. The new equipment requires fewer workers and uses less power to operate. The old equipment has a net disposal value of zero. Required: For Armidale Cakes proposals for 2019, answer whether the following items are relevant (R) or irrelevant (l) for each proposal. Treat each proposal independently. Proposal 1 Proposal 2 A) Total variable manufacturing overhead, Part A B) Total variable manufacturing overhead, Part B C) Cost of old equipment for manufacturing, Part B D) Cost of new equipment for manufacturing, Part B E) Total variable selling and administrative costs Total variable costs of assembling final products Total direct manufacturing materials, Part A H) Total direct manufacturing materials, Part B 1) Total direct manufacturing labour, Part A Total direct manufacturing labour, Part B
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started