HW Part 2: Short Response questions. Please read each question carefully. You must respond to each question posed in a minimum of 3 to 4 sentences, or more if specified in the select problem. Question 1: Sin Corp. has been in operation for 5 years. The company produces bats. which are used for the sport of baseball. Each year the company calculates a predetermined overhead cate which it uses to allocated its manufacturing overhead costs in the month of January. The company's costs fluctuate quite significantly in relation to the amount of actual costs as determined at the end of the year. The company's sales are relatively consistent except for in the spring (mostly the 2nd quarter) and in the fall months (mostly the 3rd quarter). Every year the company's manufacturing overhead costs are significantly overstated or understated. Required: Discuss 2 issues you have identified which could explain the reason for the significant fluctuations from year to year. Provide at least one solutioo which could help address the issues you have identified. Question 2: Identify the product cost noted below and calculate the total amount of product cost in our table manufacturing business. You must provide one sentence explaining why each is or is not a component of product costs. Salary of CEO $250.000 Salary of Plant Supervisor $40,000 Lease on manufacturing plant $15,000 Utilities of storage facility where raw materials are stored until needed for production $5,000 Glue use in the production of tables $1.200 Liability insurance for protection against lawsuits by consumers $3,500 Advertising budget to market our custom table line $7,000 Testing cost for new product line being considered $10,000 Wages of janitors who clean the factory floor every day at end of shift $32.000 Question 3 Explain how incremental analysis plays a key part in helping companies make business decisions that promote their profit seeking goals, and the importance of the contribution margin income statement approach over a GAAP basis financial statement. HW Part 2: Short Response questions. Please read each question carefully. You must respond to each question posed in a minimum of 3 to 4 sentences, or more if specified in the select problem. Question 1: Sin Corp. has been in operation for 5 years. The company produces bats. which are used for the sport of baseball. Each year the company calculates a predetermined overhead cate which it uses to allocated its manufacturing overhead costs in the month of January. The company's costs fluctuate quite significantly in relation to the amount of actual costs as determined at the end of the year. The company's sales are relatively consistent except for in the spring (mostly the 2nd quarter) and in the fall months (mostly the 3rd quarter). Every year the company's manufacturing overhead costs are significantly overstated or understated. Required: Discuss 2 issues you have identified which could explain the reason for the significant fluctuations from year to year. Provide at least one solutioo which could help address the issues you have identified. Question 2: Identify the product cost noted below and calculate the total amount of product cost in our table manufacturing business. You must provide one sentence explaining why each is or is not a component of product costs. Salary of CEO $250.000 Salary of Plant Supervisor $40,000 Lease on manufacturing plant $15,000 Utilities of storage facility where raw materials are stored until needed for production $5,000 Glue use in the production of tables $1.200 Liability insurance for protection against lawsuits by consumers $3,500 Advertising budget to market our custom table line $7,000 Testing cost for new product line being considered $10,000 Wages of janitors who clean the factory floor every day at end of shift $32.000 Question 3 Explain how incremental analysis plays a key part in helping companies make business decisions that promote their profit seeking goals, and the importance of the contribution margin income statement approach over a GAAP basis financial statement
