Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

can you help me deal with this question asap? Case Study 2: Gringott's The Gringott's Mine extracts gold in central London. Each tonne mined is

image text in transcribed

can you help me deal with this question asap?

image text in transcribedimage text in transcribed
Case Study 2: Gringott's The Gringott's Mine extracts gold in central London. Each tonne mined is 40% Grade F (fine) gold, 40% Grade VG (very good) gold, and 20% gold alloy (not so great, but still shiny and good for making things a gold colour). Output usually sells within two months. In January, Gringott's mined 1,000 tonnes of gold. It spent {10,000 on the mining process. Grade F gold sells for {1000 per tonne. Grade VG gold sells for f60 per tonne. Gringott's gets one-quarter of a vat of gold alloy from each tonne of gold processed. The gold alloy sells for $60 per vat. Bogrod, the head goblin at Gringott's bank has been approached by one of his workers, Gornok, with a proposal to further process Grade VG gold into Galleons on-site. Gornok insists this is a good idea since idle goblin-hours (labour-hours) are available. The process would cost f6000 with no loss in volume. One tonne of Grade VG gold makes 108,000 Galleons. Currently, Gringott's sells gold to the Muggle Mint for processing into Galleons (currency; think about a mine selling money to a bank; they are outsourcing processing of gold into coins). The Muggle Mint sells Galleons back to Gringott's for a price of 5.50 per 1 00 Galleons (ie. Gringott's is buying back the finished product from the Mint. With Gornok's suggestion they would be able to by-pass this and complete the entire process on their own).Case Study 2: Gringott's (15 marks) 1. Draw a diagram to depict this process. Be sure to label all the relevant product categories, key points in the process, and related costs for each stage and output. Show your work. (5 marks) *you may draw and scan a photo of a diagram and paste it in your excel tab for this question* 2. With respect to Gornok's suggestion: a. List and explain the costs that are relevant to Bogrod's decision. If a cost is not relevant, explain why using simple terminology that Bogrod will understand. Remember, he has never taken a cost accounting course (or any course for that matter). (4 marks) b. Should Bogrod bring Galleon production in house? Support your answer with a balanced analysis of both quantitative and qualitative factors. (6 marks)

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_2

Step: 3

blur-text-image_3

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

Financial Accounting Information for Decisions

Authors: John J. Wild

9th edition

1259917045, 978-1259917042

More Books

Students also viewed these Accounting questions

Question

Subjective norms, i.e. the norms of the target group

Answered: 1 week ago