I need a tutor to help me complete 3 Exercise questions in Accounting for Decision Making.I have started the first question already,Exercise 21.6 an Incremental Analysis for a Make or Buy Decision, as the question asks toprepare a comparative schedule in theformat illustrated in Exhibit 21?6. So I filled in some of the data in the format suggested. Anything left blank I still need an answer to though. Thanks in advance :)

Exercise 21.6 Incremental Analysis for a Make or Buy Decision The cost to Swank Company of manufacturing 15,000 units of a particular part is $135,000, of which $60,000 is fixed and $75,000 is variable. The company can buy the part from an outside supplier for $6 per unit. Fixed costs will remain the same regardless of Swank's decision. Should the company buy the part or continue to manufacture it? Prepare a comparative schedule in the format illustrated in Exhibit 21-6 . Manufacturing Costs: Direct Materials ............................................................................................................................. Direct Labor..................................................................................................................... ................ Variable Overhead.................................................................................................................. .......75,000 Fixed Overhead per month..........................................................................................................60,000 Total Cost of Manufacturing 15,000 units per month.............................................. $135,000 Average Manufacturing cost per unit ($ / units) ...............................................................$6 Make the Part Analysis Buy the Part Manufacturing costs for 15,000 units: Direct Materials......................................................... Direct Labor............................................................... Variable Overhead......................................................75,000 Fixed Overhead...........................................................60,000 Purchase price of part, $6 per unit.......................... Incremental Total Cost to acquire part.........................................$135,000 Exercise 22.9 Transfer Pricing Delmar Foods has two divisions: (1) a Processed Meat Division and (2) a Frozen Pizza Division. Delmar's frozen pizzas use processed meat as a topping. The company's Processed Meat Division supplies the Frozen Pizza Division with all of its meat toppings. Delmar managers are paid bonuses based on their division's profitability. The manager of the Processed Meat Division argues for a transfer price based on a market value approach. The manager of the Frozen Pizza Division favors a transfer price based on a cost approach. Explain how Delmar's bonus system may influence each manager's opinion regarding which approach to use in establishing a transfer price. Exercise 22.1A Preparing and Using Responsibility Income Statements Chocolatiers Company produces two products: Solid chocolate and powdered chocolate. Cost and revenue data for each product line for the current month are as follows: Product Lines Solid Powdered Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $850,000 Contribution margin as a percentage of sales . . . . . . . . . . . . . . . . . . 45% $870,000 55% Fixed costs traceable to product lines . . . . . . . . . . . . . . . . . . . . . . . . $175,000 $250,000 In addition, fixed costs that are common to both product lines amount to $125,000. Instructions: a. Prepare Chocolatiers's responsibility income statement for the current month. Report the responsibility margin for each product line and income from operations for the company as a whole. Also include columns showing all dollar amounts as percentages of sales. b. According to the analysis performed in part a, which product line is more profitable? Should the common fixed costs be considered when determining the profitability of individual product lines? Why or why not? c. Chocolatiers has $15,000 to be used in advertising for one of the two product lines and expects that this expenditure will result in additional sales of $50,000. How should the company decide which product line to advertise? Exercise 21.6 Incremental Analysis for a Make or Buy Decision The cost to Swank Company of manufacturing 15,000 units of a particular part is $135,000, of which $60,000 is fixed and $75,000 is variable. The company can buy the part from an outside supplier for $6 per unit. Fixed costs will remain the same regardless of Swank's decision. Should the company buy the part or continue to manufacture it? Prepare a comparative schedule in the format illustrated in Exhibit 21-6. Manufacturing Costs: Direct Materials ............................................................................................................................. Direct Labor..................................................................................................................... ................ Variable Overhead.................................................................................................................. .......75,000 Fixed Overhead per month..........................................................................................................60,000 Total Cost of Manufacturing 15,000 units per month.............................................. $135,000 Average Manufacturing cost per unit ($ / units) ............................................................... SOLUTION Make the Part Analysis Buy the Part Incremental Manufacturing costs for 15,000 units: Direct Materials......................................................... Direct Labor............................................................... Variable Overhead......................................................75,000 75,000 Fixed Overhead........................................................... 60,000 NIL 60,000 Purchase price of part, $6 per unit.......................... 90,000 90,000 - Total Cost to acquire part.........................................135,000 15,000 150,000 - - Since fixed costs will not change / decrease, it is irrelevant cost. - The cost of buying the part is more than making it. Hence the manufacturing of part should continue. Exercise 22.9 Transfer Pricing Delmar Foods has two divisions: (1) a Processed Meat Division and (2) a Frozen Pizza Division. Delmar's frozen pizzas use processed meat as a topping. The company's Processed Meat Division supplies the Frozen Pizza Division with all of its meat toppings. Delmar managers are paid bonuses based on their division's profitability. The manager of the Processed Meat Division argues for a transfer price based on a market value approach. The manager of the Frozen Pizza Division favors a transfer price based on a cost approach. Explain how Delmar's bonus system may influence each manager's opinion regarding which approach to use in establishing a transfer price. SOLUTION The transfer of product from one division to other division of the same is made on a transfer price, to be fixed on either of these three: a) Cost price b) Market price c) Negotiated price Since the performance of the manager of each division is evaluated by the net income of his division, the manager will be interested in the maximum savings to his division. In the given case, manager of Processed Meat Division will be interested to transfer his product at market price to get maximum transfer price. In there is a surplus capacity the manager may agree for a price less than the market price. If there is no surplus capacity, and the outside sale will decrease due to this transfer, the manager will not agree for a transfer price less than the market price. However the manager of Frozen Pizza Division will be interested to get the product at cost price of Processed Meat Division, and maximum savings for his division. However, he will agree to a transfer price less than the market price. If there is a surplus capacity available with Processed Meat Division, the Management should allow both the managers to sit and decided a negotiated price, which should be more than the cost price and less than the market price. This will increase the net income for the divisions, and the bonus of both managers will increase. Exercise 22.1A Preparing and Using Responsibility Income Statements Chocolatiers Company produces two products: Solid chocolate and powdered chocolate. Cost and revenue data for each product line for the current month are as follows: Product Lines Solid Powdered Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $850,000 Contribution margin as a percentage of sales . . . . . . . . . . . . . . . . . . 45% $870,000 55% Fixed costs traceable to product lines . . . . . . . . . . . . . . . . . . . . . . . . $175,000 $250,000 In addition, fixed costs that are common to both product lines amount to $125,000. Instructions: a. Prepare Chocolatiers's responsibility income statement for the current month. Report the responsibility margin for each product line and income from operations for the company as a whole. Also include columns showing all dollar amounts as percentages of sales. b. According to the analysis performed in part a, which product line is more profitable? Should the common fixed costs be considered when determining the profitability of individual product lines? Why or why not? c. Chocolatiers has $15,000 to be used in advertising for one of the two product lines and expects that this expenditure will result in additional sales of $50,000. How should the company decide which product line to advertise? SOLUTION a. Prepare Chocolatiers's responsibility income statement for the current month. Report the responsibility margin for each product line and income from operations for the company as a whole. Also include columns showing all dollar amounts as percentages of sales. Sales Less: Variable costs Contribution Margin Fixed cost traceable to product line Product line margin Common Fixed costs Net income Solid $8,50,00 0 $4,67,50 0 $3,82,50 0 $1,75,00 0 $2,07,50 0 Product Lines Powered 100 $8,70,00 % 0 100% $3,91,50 55% 0 45% $4,78,50 45% 0 55% $2,50,00 21% 0 29% $2,28,50 24% 0 26% Total $17,20,00 0 $8,59,000 $8,61,000 $4,25,000 $4,36,000 $1,25,000 $3,11,000 10 0% 50 % 50 % 25 % 25 % 7% 18 % b. According to the analysis performed in part a, which product line is more profitable? Should the common fixed costs be considered when determining the profitability of individual product lines? Why or why not? From the analysis made above, it is evident that Powered product line is more profitable as it has 26% product line margin against 24% of Solid product line. Common Fixed costs are not considered for determining the profitability of individual product line, as these costs are not incurred for specific product line. These expenses are incurred for common facilities and cannot be decreased / removed in case a product line is dropped. c. Chocolatiers has $15,000 to be used in advertising for one of the two product lines and expects that this expenditure will result in additional sales of $50,000. How should the company decide which product line to advertise? The increase in advertising expense will bring an additional sales. The increase in sales will bring the following results: Product Lines Solid $50,000 Powered $50,000 Less: Variable costs $27,500 $22,500 Contribution Margin $22,500 $27,500 Less: Advertising cost $15,000 $15,000 Net Increase in margin $7,500 $12,500 Sales +Exercise 21.6 Incremental Analysis for a Make or Buy Decision The cost to Swank Company of manufacturing 15,000 units of a particular part is $135,000, of which $60,000 is fixed and $75,000 is variable. The company can buy the part from an outside supplier for $6 per unit. Fixed costs will remain the same regardless of Swank's decision. Should the company buy the part or continue to manufacture it? Prepare a comparative schedule in the format illustrated in Exhibit 21-6. Manufacturing Costs: Direct Materials ............................................................................................................................. ? Direct Labor..................................................................................................................... ................ ? Variable Overhead.................................................................................................................. .......75,000 Fixed Overhead per month..........................................................................................................60,000 Total Cost of Manufacturing 15,000 units per month.............................................. $135,000 Average Manufacturing cost per unit ($ ? / ? units) ............................................................... ? SOLUTION Make the Part Analysis Buy the Part Incremental Manufacturing costs for 15,000 units: Direct Materials....................................................... ? Direct Labor............................................................... ? Variable Overhead......................................................75,000 75,000 Fixed Overhead........................................................... 60,000 NIL Purchase price of part, $6 per unit.......................... 90,000 ? Total Cost to acquire part.........................................135,000 15,000 60,000 90,000 - 150,000 - - Since fixed costs will not change / decrease, it is irrelevant cost. - The cost of buying the part is more than making it. Hence the manufacturing of part should continue. Exercise 22.9 Transfer Pricing Delmar Foods has two divisions: (1) a Processed Meat Division and (2) a Frozen Pizza Division. Delmar's frozen pizzas use processed meat as a topping. The company's Processed Meat Division supplies the Frozen Pizza Division with all of its meat toppings. Delmar managers are paid bonuses based on their division's profitability. The manager of the Processed Meat Division argues for a transfer price based on a market value approach. The manager of the Frozen Pizza Division favors a transfer price based on a cost approach. Explain how Delmar's bonus system may influence each manager's opinion regarding which approach to use in establishing a transfer price. SOLUTION The transfer of product from one division to other division of the same is made on a transfer price, to be fixed on either of these three: a) Cost price b) Market price c) Negotiated price Since the performance of the manager of each division is evaluated by the net income of his division, the manager will be interested in the maximum savings to his division. In the given case, manager of Processed Meat Division will be interested to transfer his product at market price to get maximum transfer price. In there is a surplus capacity the manager may agree for a price less than the market price. If there is no surplus capacity, and the outside sale will decrease due to this transfer, the manager will not agree for a transfer price less than the market price. However the manager of Frozen Pizza Division will be interested to get the product at cost price of Processed Meat Division, and maximum savings for his division. However, he will agree to a transfer price less than the market price. If there is a surplus capacity available with Processed Meat Division, the Management should allow both the managers to sit and decided a negotiated price, which should be more than the cost price and less than the market price. This will increase the net income for the divisions, and the bonus of both managers will increase. Exercise 22.1A Preparing and Using Responsibility Income Statements Chocolatiers Company produces two products: Solid chocolate and powdered chocolate. Cost and revenue data for each product line for the current month are as follows: Product Lines Solid Powdered Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $850,000 Contribution margin as a percentage of sales . . . . . . . . . . . . . . . . . . 45% $870,000 55% Fixed costs traceable to product lines . . . . . . . . . . . . . . . . . . . . . . . . $175,000 $250,000 In addition, fixed costs that are common to both product lines amount to $125,000. Instructions: a. Prepare Chocolatiers's responsibility income statement for the current month. Report the responsibility margin for each product line and income from operations for the company as a whole. Also include columns showing all dollar amounts as percentages of sales. b. According to the analysis performed in part a, which product line is more profitable? Should the common fixed costs be considered when determining the profitability of individual product lines? Why or why not? c. Chocolatiers has $15,000 to be used in advertising for one of the two product lines and expects that this expenditure will result in additional sales of $50,000. How should the company decide which product line to advertise? SOLUTION a. Prepare Chocolatiers's responsibility income statement for the current month. Report the responsibility margin for each product line and income from operations for the company as a whole. Also include columns showing all dollar amounts as percentages of sales. Sales Less: Variable costs Contribution Margin Fixed cost traceable to product line Product line margin Common Fixed costs Net income Solid $8,50,00 0 $4,67,50 0 $3,82,50 0 $1,75,00 0 $2,07,50 0 Product Lines Powered 100 $8,70,00 % 0 100% $3,91,50 55% 0 45% $4,78,50 45% 0 55% $2,50,00 21% 0 29% $2,28,50 24% 0 26% Total $17,20,00 0 $8,59,000 $8,61,000 $4,25,000 $4,36,000 $1,25,000 $3,11,000 10 0% 50 % 50 % 25 % 25 % 7% 18 % b. According to the analysis performed in part a, which product line is more profitable? Should the common fixed costs be considered when determining the profitability of individual product lines? Why or why not? From the analysis made above, it is evident that Powered product line is more profitable as it has 26% product line margin against 24% of Solid product line. Common Fixed costs are not considered for determining the profitability of individual product line, as these costs are not incurred for specific product line. These expenses are incurred for common facilities and cannot be decreased / removed in case a product line is dropped. c. Chocolatiers has $15,000 to be used in advertising for one of the two product lines and expects that this expenditure will result in additional sales of $50,000. How should the company decide which product line to advertise? The increase in advertising expense will bring an additional sales. The increase in sales will bring the following results: Product Lines Solid $50,000 Powered $50,000 Less: Variable costs $27,500 $22,500 Contribution Margin $22,500 $27,500 Less: Advertising cost $15,000 $15,000 Net Increase in margin $7,500 $12,500 Sales +Exercise 21.6 Incremental Analysis for a Make or Buy Decision The cost to Swank Company of manufacturing 15,000 units of a particular part is $135,000, of which $60,000 is fixed and $75,000 is variable. The company can buy the part from an outside supplier for $6 per unit. Fixed costs will remain the same regardless of Swank's decision. Should the company buy the part or continue to manufacture it? Prepare a comparative schedule in the format illustrated in Exhibit 21-6. Manufacturing Costs: Direct Materials ............................................................................................................................. ? Direct Labor..................................................................................................................... ................ ? Variable Overhead.................................................................................................................. .......75,000 Fixed Overhead per month..........................................................................................................60,000 Total Cost of Manufacturing 15,000 units per month.............................................. $135,000 Average Manufacturing cost per unit ($ ? / ? units) ............................................................... ? SOLUTION Make the Part Analysis Buy the Part Incremental Manufacturing costs for 15,000 units: Direct Materials....................................................... ? Direct Labor............................................................... ? Variable Overhead......................................................75,000 75,000 Fixed Overhead........................................................... 60,000 NIL Purchase price of part, $6 per unit.......................... 90,000 ? Total Cost to acquire part.........................................135,000 15,000 60,000 90,000 - 150,000 - - Since fixed costs will not change / decrease, it is irrelevant cost. - The cost of buying the part is more than making it. Hence the manufacturing of part should continue. Exercise 22.9 Transfer Pricing Delmar Foods has two divisions: (1) a Processed Meat Division and (2) a Frozen Pizza Division. Delmar's frozen pizzas use processed meat as a topping. The company's Processed Meat Division supplies the Frozen Pizza Division with all of its meat toppings. Delmar managers are paid bonuses based on their division's profitability. The manager of the Processed Meat Division argues for a transfer price based on a market value approach. The manager of the Frozen Pizza Division favors a transfer price based on a cost approach. Explain how Delmar's bonus system may influence each manager's opinion regarding which approach to use in establishing a transfer price. SOLUTION The transfer of product from one division to other division of the same is made on a transfer price, to be fixed on either of these three: a) Cost price b) Market price c) Negotiated price Since the performance of the manager of each division is evaluated by the net income of his division, the manager will be interested in the maximum savings to his division. In the given case, manager of Processed Meat Division will be interested to transfer his product at market price to get maximum transfer price. In there is a surplus capacity the manager may agree for a price less than the market price. If there is no surplus capacity, and the outside sale will decrease due to this transfer, the manager will not agree for a transfer price less than the market price. However the manager of Frozen Pizza Division will be interested to get the product at cost price of Processed Meat Division, and maximum savings for his division. However, he will agree to a transfer price less than the market price. If there is a surplus capacity available with Processed Meat Division, the Management should allow both the managers to sit and decided a negotiated price, which should be more than the cost price and less than the market price. This will increase the net income for the divisions, and the bonus of both managers will increase. Exercise 22.1A Preparing and Using Responsibility Income Statements Chocolatiers Company produces two products: Solid chocolate and powdered chocolate. Cost and revenue data for each product line for the current month are as follows: Product Lines Solid Powdered Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $850,000 Contribution margin as a percentage of sales . . . . . . . . . . . . . . . . . . 45% $870,000 55% Fixed costs traceable to product lines . . . . . . . . . . . . . . . . . . . . . . . . $175,000 $250,000 In addition, fixed costs that are common to both product lines amount to $125,000. Instructions: a. Prepare Chocolatiers's responsibility income statement for the current month. Report the responsibility margin for each product line and income from operations for the company as a whole. Also include columns showing all dollar amounts as percentages of sales. b. According to the analysis performed in part a, which product line is more profitable? Should the common fixed costs be considered when determining the profitability of individual product lines? Why or why not? c. Chocolatiers has $15,000 to be used in advertising for one of the two product lines and expects that this expenditure will result in additional sales of $50,000. How should the company decide which product line to advertise? SOLUTION a. Prepare Chocolatiers's responsibility income statement for the current month. Report the responsibility margin for each product line and income from operations for the company as a whole. Also include columns showing all dollar amounts as percentages of sales. Sales Less: Variable costs Contribution Margin Fixed cost traceable to product line Product line margin Common Fixed costs Net income Solid $8,50,00 0 $4,67,50 0 $3,82,50 0 $1,75,00 0 $2,07,50 0 Product Lines Powered 100 $8,70,00 % 0 100% $3,91,50 55% 0 45% $4,78,50 45% 0 55% $2,50,00 21% 0 29% $2,28,50 24% 0 26% Total $17,20,00 0 $8,59,000 $8,61,000 $4,25,000 $4,36,000 $1,25,000 $3,11,000 10 0% 50 % 50 % 25 % 25 % 7% 18 % b. According to the analysis performed in part a, which product line is more profitable? Should the common fixed costs be considered when determining the profitability of individual product lines? Why or why not? From the analysis made above, it is evident that Powered product line is more profitable as it has 26% product line margin against 24% of Solid product line. Common Fixed costs are not considered for determining the profitability of individual product line, as these costs are not incurred for specific product line. These expenses are incurred for common facilities and cannot be decreased / removed in case a product line is dropped. c. Chocolatiers has $15,000 to be used in advertising for one of the two product lines and expects that this expenditure will result in additional sales of $50,000. How should the company decide which product line to advertise? The increase in advertising expense will bring an additional sales. The increase in sales will bring the following results: Product Lines Solid $50,000 Powered $50,000 Less: Variable costs $27,500 $22,500 Contribution Margin $22,500 $27,500 Less: Advertising cost $15,000 $15,000 Net Increase in margin $7,500 $12,500 Sales