Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Attached are a few questions I am having trouble with in Acct. 2020. 1. Part P40 is a part used in the production of air

Attached are a few questions I am having trouble with in Acct. 2020.

image text in transcribed 1. Part P40 is a part used in the production of air conditioners at Jackson Corporation. The following costs and data relate to the production of Part P40: Number of parts produced annually $22,000 Fixed costs $41,000 Variable costs $66,000 Total cost to produce $107,000 Jackson Corporation can purchase the part from an outside supplier for $ 4.53 per unit. If they purchase from the outside supplier, 50% of the fixed costs would be avoided. If Jackson Corporation makes the part, how much will its operating income be? 2. Mountaintop golf course is planning for the coming season. Investors would like to earn a 12% return on the company's $45,000,000 of assets. The company primarily incurs fixed costs to groom the greens and fairways. Fixed costs are projected to be $23,000,000 for the golfing season. About 450,000 golfers are expected each year. Variable costs are about $15 per golfer. Mountaintop golf course has a favorable reputation in the area and therefore, has some control over the price of a round of golf. Using a costplus approach, what price should Mountaintop charge for a round of golf? 3. Four Guys Company has in its inventory 5,000 damaged televisions that cost $50,000. The televisions can be sold in their present condition for $32,000, or repaired at a cost of $43,000 and sold for $76,000. What is the opportunity cost of selling the televisions in their present condition? 4. Brittany Furniture manufactures two products: Futons and Recliners. The following data are available: Futons Recliners Sales price $510 $730 Variable costs $390 $415 The company can manufacture 44 futons per machine hour and 11 recliners per machine hour. The company's production capacity is 4,800 machine hours per month. To maximize profits, what product and how many units should the company produce in a month? 5. Contribution margin income statement data for the most recent year follow: Total Cat Food Dog Food Sales revenue $385,000 $300,000 $85,000 Variable expenses $196,000 $165,000 $31,000 Contribution margin $189,000 $135,000 $54,000 Fixed expenses $102,000 $50,000 $52,000 Operating income (loss) $87,000 $85,000 $2,000 Assuming the Dog food line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the Dog food line is used to double the production of Cat food, how will operating income be affected? 6. Brittany Furniture manufactures two products, pillows and cushions, from a joint process. Pillows are allocated $7,000 of the total joint costs of $27,000. There are 3,000 pillows produced and 3,000 cushions produced each year. Pillows can be sold at the split-off point for $11 per unit, or they can be processed further into a deluxe pillow for additional processing costs of $8,400 and sold for $17 or each deluxe pillow. If the pillows are processed further and made into deluxe pillows, the effect on operating income would be? 7. The following information relates to current production of outdoor chaise lounges Backyard Posh: Variable manufacturing costs per unit $102.00 Total fixed manufacturing costs $525,000 Variable marketing and administrative costs per unit $30.00 Total fixed marketing and administrative costs $250,000 The regular selling price per chaise lounge is $300.00. The company is analyzing the opportunity to accept a special sales order for 200 chaise lounges at a price of $200.00 per unit. Fixed costs would increase by $20,000. The company has the capacity to produce 15,000 chaise lounges per year, but is currently producing and selling 10,000 chaise lounges per year. Regular sales will not be affected by the special order. If the company were to accept this special order, how would operating income be affected

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Credit Risk Of Complex Derivatives

Authors: Erik Banks

3rd Edition

1403916691, 9781403916693

More Books

Students also viewed these Accounting questions

Question

Discuss the objectives of discipline and appeals systems

Answered: 1 week ago