Attached below are two questions foe Manegerial Accounting 500

Ottina Company had the following data (in thousands) for a given period. Assume there are no inventories. Requirement 1. Compute the (a) variable manufacturing cost of goods sold, (b) variable selling and administrative expenses, and (c) fixed indirect manufacturing costs. (a) Compute the variable manufacturing cost of goods sold. (Abbreviations used: admin. = administrative; exp. = expense; mfg = manufacturing.) + + + + Variable mfg. cost of goods = sold = (b) Compute the variable selling and administrative expenses. (Abbreviations used: admin. = administrative; COGS = cost of goods sold; exp. = expense.) - - - - Variable selling and administrative = exp. = (c) Compute the fixed indirect manufacturing costs. (Abbreviations used: admin. = administrative; COGS = cost of goods sold; exp. = expense.) - - More Less DATA Direct labor Direct materials Variable indirect manufacturing Contribution margin Fixed selling and administrative expenses Operating income Sales QUESTION 2 $185 150 100 210 90 25 905 = = Fixed indirect manufacturing Belltown Athletic Supply (BAS) makes game jerseys for athletic teams. The K. J. Kennedy soccer club has offered to buy 130 jerseys for the teams in its league for $ 15 per jersey. The team price for such jerseys normally is $ 18 an 80% markup over BAS's purchase price of $10 per jersey. BAS adds a name and number to each jersey at a variable cost of $ 3 per jersey. The annual fixed cost of equipment used in the printing process is $6,100, and other fixed costs allocated to jerseys are $2,300. BAS makes about 2,100 jerseys per year, so the fixed cost is $4 per jersey. The equipment is used only for printing jerseys and stands idle 75% of the usable time. The manager of BAS turned down the offer, saying, "If we sell at $ 15 and our cost is $17, we lose money on each jersey we sell. We would like to help your league, but we can't afford to lose money on the sale." Requirement 1. Compute the amount by which the operating income of BAS would change if it accepted K. J. Kennedy offer by using the contribution-margin approach. (For amounts with a $0 balance, make sure to enter "0" in the appropriate cell.) Effect of Special Order Units= Sales= Operating income = Requirement 2. Suppose you were the manager of BAS. Would you accept the offer? In addition to considering the quantitative impact computed in requirement 1, list two qualitative considerations that would influence your decision-one qualitative factor supporting acceptance of the offer and one supporting rejection. If maximizing operating income in the short run were the only goal, the order should be accepted. not be accepted. One reason to reject the offer is that accepting K. J. Kennedy offer may will not generate similar (low) offers from other clubs who now willingly pay the $ 18 normal price. Increased Lost profits on such business might more than offset the gain on sale loss on sale from K. J. Kennedy. On the other hand, a reason to accept the offer is that this might be a way of gaining K. J. Kennedy as a regular an occasional customer who will then buy other items that generate an even greater profit. minimal profit. More Less Requirements 1. Compute the amount by which the operating income of BAS would change if it accepted K. J. Kennedy offer. 2. Suppose you were the manager of BAS. Would you accept the offer? In addition to considering the quantitative impact computed in requirement 1, list two qualitative considerations that would influence your decision-one qualitative factor supporting acceptance of the offer and one supporting rejection. l