AutoSave ON w- Ch 10 Pratice - Saved Q v Home Insert Draw Design Layout References Mailings Review View Share Comments Outline Ruler One Page Print Web Gridlines Zoom Zoom BE Multiple Pages New Arrange Split Switch Layout Layout Draft Focus Immersive Macros Reader Navigation Pane to 100% , Page Width Window All Windows Ch 10 Problem B (pricing) DO ONLY IN EXCEL AND SCREENSHOT IT PLEASE YOU CAN WRITE IT TOO IF YOU WANT. SHOW ALL OF YOUR CALCULATIONS. Make sure your decision provides the decision AND why you made that selecting using your analysis. Thank you. Pick-Me-Up Company is introducing a new coffee in its stores and must decide what price to set for the coffee beans. An estimated demand schedule for the product follows: Price One-pound units 72,000 56,000 48,000 36,000 30,000 Estimated costs follow: . Variable manufacturing costs $2 per unit Fixed manufacturing costs $40,000 per year Variable selling and administrative costs $1 per unit Fixed selling and administrative costs $20,000 per year a. Prepare a schedule showing management the total revenue, total cost, and total profit or loss for each selling price. b. Which price do you recommend to the management of Pick-Me-Up? Explain your answer. Problem C (special offer) Ocean View Company operates tour boats. Its predicted operations for the year are as follows: Sales (1,000 tours per year) $400,000 Costs: Variable $250 per tour Fixed $100,000 per year The company has received a request to offer 100 tours for $300 each. Ocean View has plenty of the company's capacity to do these tours in addition to its regular business. Doing these tours would not affect egular sales or its fixed costs. a. Should the company do the special tours for $300 per tour? b. What is the effect of the decision on the company's operating profit? Adapted from "Accounting Principles: A Business Perspective, Financial Accounting (Chapters 9 - 18)" A Textbook Equity Open College Textbook originally by Hermanson, Edwards, and Maher Adapted from "Accounting Principles: A Business Perspective, Financial Accounting (Chapters 9 - 18)" A Textbook Equity Open College Textbook originally by Hermanson, Edwards, and Maher Problem D (eliminate department) Following are sales and other operating data for the three products made and sold by Page 1 of 4 897 words English (United States) Focus + 77%AutoSave ON w- Ch 10 Pratice - Saved Q v Home Insert Draw Design Layout References Mailings Review View Share Comments Outline Ruler One Page Print Web Gridlines BE Multiple Pages Focus Immersive Zoom Zoom New Arrange Split Switch Macros Layout Layout Draft Reader Navigation Pane to 100% , Page Width Window All Windows Adapted from "Accounting Principles: A Business Perspective, Financial Accounting (Chapters 9 - 18)" A Textbook Equity Open College Textbook originally by Hermanson, Edwards, and Maher Adapted from "Accounting Principles: A Business Perspective, Financial Accounting (Chapters 9 - 18)" A Textbook Equity Open College Textbook originally by Hermanson, Edwards, and Maher Problem D (eliminate department) Following are sales and other operating data for the three products made and sold by Ranger Company: Problem G (special offer - ingredient) Quality Calc, Inc., purchases calculator components and assembles them into handheld calculators. The variable cost of one Model Product Sales A B $ 200,000 Total A-25 is as follows: $ 600,000 $ 300,000 $1,100,000 Materials $10 Manufacturing costs: Fixed $ 60,000 Variable 280,000 $ 60,000 Inspection and rework costs 2 20,000 $ 140,000 220,000 100,000 600,000 All other variable costs 5 Selling and administrative expenses: Total variable cost per case $17 Fixed 20,000 20,000 2,00 Variable 40,000 30:000 $2,000 90.000 In addition, this product incurs $5,000,000 of fixed costs per year. Total costs $ 400,000 20.000 Net income $ 200,000 $ 280,000 $ 20,000 $ 202,000 $ (2,000) $ 882,000 $ 218,000 The company inspects the product at various stages. The cost of inspecting the product and replacing components averages $2 per calculator, shown as the inspection and rework costs. Management is considering purchasing better components that would both increase quality and In view of the net loss for Product C, Ranger's management is considering dropping that expand the calculator's capacity. These new components would increase materials costs to product. All variable costs are direct costs and would be eliminated if Product C were dropped. $12.50 per calculator, but would decrease inspection and rework costs to $1.50 per calculator. Fixed costs are indirect costs; no fixed costs would be eliminated. Assume that the space used All other variables cost would remain at $5 per calculator. Fixed costs would remain at to produce Product C would be left idle. $5,000,000 per year. Would you recommend the elimination of Product C? Give supporting computations. Quality Calc currently sells each A-25 calculator for $25 at a volume of 1 million calculators per year. Management believes it can increase the price of the calculator (which would now Problem E (sell as is or process further) Sierra Lumber Company produces lumber. The be called the A-25 STAR) to $30 per calculator because of its increased capability. Sales volume would remain at 1 million calculators per year for the improved A-25 STAR. Should company has two grades of lumber at the split-off point, A and B. Grade A sells for $4 per Quality Calc purchase the better components? board foot and Grade B sells for $2 per board foot. This lumber is suitable for framing and most exterior work but not for the interior of buildings. Either grade can be further processed to make it suitable for interior work at a cost of $1.20 per board foot. After this further processing, the firm can sell Grade A lumber for $5.50 per board foot and Grade B for $3.00 per board foot. Would you recommend the company sell the lumber at the split-off point or process it further to make it suitable for interior work? Explain and give supporting computations. Problem F (make or buy) Skate-Right Company, a skateboard manufacturer, is currently operating at 60% capacity and producing about 8,000 units a year. To use more capacity, the manager has been considering the research and development department's suggestion that the company manufacture its own wheels. Currently the company purchases wheels from a supplier at a unit price of $20. (Each unit is a set of wheels for a skateboard.) Estimates show the company can manufacture its own wheels at $10 for direct materials costs and $4 for direct labor cost per unit. The variable factory overhead is$1 per unit. The company's accountants would probably allocate another $6 per unit to the wheels. a. Should Skate-Right make or buy the wheels? b. Suppose Skate-Right could rent out the factory space needed to make the wheels for $5,000 a month. How would this affect your decision in (a), if at all? Page 3 of 4 897 words LX English (United States) Focus + 77%