Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

hi, do you working on the assignment of what i attached? Last month you took over the position of Management Accountant at Boron Brothers Pty

hi, do you working on the assignment of what i attached?

image text in transcribed Last month you took over the position of Management Accountant at Boron Brothers Pty Ltd which makes toys for children at its factory located in Logan. The documents relating to the next year budget show the following information in relation to three toys that Boron Brothers Pty Ltd plans to make and sell next year. TEDDYS SCOOBYS BUNNYS Direct materials per unit $12.00 $15.00 $18.00 Direct Labour per unit $9.00 $15.00 $20.00 Variable O/H per unit $11.80 $14.95 $24.85 Fixed O/H per unit $5 $7.50 $9.75 Fixed Marketing Costs per unit $1.50 $2.00 $2.75 Head Office allocated costs per unit $3.00 $3.50 $3.75 Selling Price per unit $40 $57 $78 Machine Hrs per unit 0.4hrs 0.7hrs 0.9hrs Demand 12,000 units 12,000 units 6,000 units The total machine hours available in the next year are limited to 12,000 hours due to major maintenance work that needs to be carried out every 5 years on some machines. The production manager has indicated that it is not possible to meet the total demand for the three toys due to this reduction in the available machine hours. The managing director has asked you to decide on the product mix for the next year to maximise the profits from the available machine hours. Required; A. Out of the information in the budget documents given above, state which information is NOT relevant to deciding the product mix to maximise the contribution to company profits (15 marks). B. Using the relevant information given above, calculate the optimum product mix that would maximise the contribution to company profits (50 marks). Estimate the contribution to profits that would result under the product mix that you calculated (15 marks). C. The company is not in a position to make any capital expenditure during next year to increase the machine capacity. Write a report to the Managing Director (not exceeding half a page) suggesting alternative strategies that can be used to meet the demand which is not met under the product mix you recommended. Your report should also indicate briefly the risks associated with the strategies that you are suggesting (20marks)

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

Financial Accounting with International Financial Reporting Standards

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

4th edition

1119504309, 1-119-50340-8, 9781119503408 , 978-1119504306

More Books

Students also viewed these Accounting questions

Question

What is a multivariate data set?

Answered: 1 week ago

Question

The relevance of the information to the interpreter

Answered: 1 week ago