lab 5 I need help answering these pages.

T.0.T.E.S. CASE STUDY - GREENBELT EXHIBIT S-C: Income by sales division T.0.T.E.S. income Statement by Sales Division . Online Sales Product Reps _ Factory Store Total .Sales . S 1,485,000 S 866,250 _ S 123,750 S 2,475,000 Variable Costs: coes 888,030 $ 518,018 _ 5 74,352 1,480,400 Sales Commissions 59,400 S 39,600 99,000 Contribution Margin s 537,570 $ 308,633 5 49,398 5 895,600 Marketing, Adveftising and Selling Admin C05\" 3 47,310 $ 31,540 $ 15,000 5 93,850 Salaries _ S S _ S 12,000 S 12,000 Allocated Admin and General Costs S 382,650 S 223,213 S 31,888 S 637,750 Operating Income {Loss} S 107,610 S 53,880 S 49,490} S 152,000 Analysis: _ Contribution Margin Avoidable Costs Projected Change in Operating Income : j : How much will income increase (or decrease) if T.0.T.E.S. closed the factory store? Should management keep the factory store open or close it? Why or why not? GREENBELT RELEVANT COSTS FOR SHORT TERM DECISIONMAKING LABS Tonia and Tara have been considering expanding their operations. They have hired a cost accountant to help them analyze the cost-effectiveness of the following business opportunities and decisions: - Special Order: One of T.O.T.E.S.' customers is interested in ordering a unique Christmas tote bag. - Outsource the cutting department: The company's fabric supplier has offered to deliver the fabric precut, which would eliminate the cutting department. - Unprotable segment: T.O.T.ES has three sales divisions: On-line, Product Representatives, and the Factory Store. In recent months, the Factory Store has shown an operating loss and management is considering closing the store. In this lab, students will evaluate specic short-term decisions based on the current company data and make recommendations to Tonia and Tara. SPECML ORDER Historically, November is a low demand month for the T.O.T.E.S. product. Consequently, the company is seeking ways to keep the production line running closer to full capacity during the month. One of T.O.T.E.S.'s top customers E asked them to produce a special tote for December. The customer is willing to pay extra for the tote. The customer wants to order 10,000 totes and will pay all freight costs. The customer wants red, glittery fabric and an additional snowake patch attached to the tote. The fabric will cost an additional $0.40 per tote, the snowake patch wholesales at $1,000 per 10,000 patches, and sewing costs will increase by $0.15 per tote. The company has the capacity to produce these 10,000 additional totes in November and no additional equipment is required. Complete Exhibit 5A then answer the subsequent gnestions. T.O.T.E.S. CASE STUDY - GREENBELT EXHIBIT 5-A: Analysis of a special order - Variable costs T.O.T.E.S. Analysis of a Special Order Use data from the job cost card and Exhibit 2-B. Variable Cost Analysis costs per unit Current DM Costs per tote Additional Fabric Cost per tote $ Other additional DM Costs s Total Direct Material Cost per tote $ Current Direct Labor Cost per tote $ Additional Direct Labor Cost per tote $ Total Direct Labor Costs Current MOH Cost per tote Additional MOH Cost per tote S Total MOH Costs per tote $ Total Variable Costs per tote S 1) Why don't you need to take fixed costs into account for this special order? 2) What is the minimal amount T.O.T.E.S. should charge the customer for each special tote (round to the penny)? Why?T.O.T.E.S. CASE STUDY - GREENBELT 3) How much would net income change if T.O.T.E.S. accepts the special order with no increase in price per tote? (Remember T.O.T.E.S. is already a protable company) (Round to the dollar). 4) How much would net income change if they increased the price to $5.20 for each customized tote (round to the dollar)? OUTSO UR CE THE CUTTING DEPARTMENT: MAKE-B UYDECISION Scenario 1: T.O.T.E.S. fabric supplier has offered to precut the fabric to T.O.T.E.S. specications for $0.60 per tote. The cost per yard of fabric would stay the same. The Standard Cost Card from Exhibit 2-B includes the breakout of direct labor costs. The company recently completed an Activity-Based Costing analysis that showed variable manufacturing overhead for the cutting department is $0.20 per tote. In addition, the cutting machines could be sold for $50,000. Use Exhibit 5B1 for your analysis. T.O.T.E.S. CASE STUDY - GREENBELT EXHIBIT 5-B-1: Scenario 1 Make-Buy Analysis Exhibit 4-B T.O.T.E.S Hints Make-Buy Analysis Current costs can be found on Exhibit 2-B. Scenario 1: Cost per unit For 520,000 units Cost to Make Cost to Buy Outsource cutting department Direct Labor - Cutting Only need to be Variable OH Costs - Cutting concerned with Sale of cutting machines the relevant costs. Total Costs Cost per unit Scenario 1 Analysis: Based on the above information, should T.O.T.E.S. outsource the cutting department? Why or why not?T.O.T.E.S. CASE STUDY - GREENBELT T.O.T.E.S. Case Study Name: Scenario 2: If T.O.T.E.S outsources the cutting department and sells the cutting machine, they would free up factory space for a new product that Tonia has created. Based on a market analysis, they have determined they could earn a contribution margin of $75,000 with additional xed costs of $30,000 if they added this product line to the company. Use Exhibit 5]}2 for your analysis. EXHIBIT 5E2: Scenario 2 MakeBny Analysis T.O.T.E.S. Make-Buy Analysis Scenario 2 Total Costs from Scenario 1 Additional Contribution Margin Less Additional Fixed Costs Additional Net QEQE. Income Net cost Scenario 2 Analysis: Should T.O.T.E.S. outsource the cutting department if this additional product line is taken into consideration? Why or why not? T.0.T.E.S. CASE STUDY - GREENBELT UNPR OFITABLE SEGMENT: DISCONTME OPERA TVG THE FA CTORYSTORE The cost accountants prepare Exhibit SC and present it to management each quarter. Costs are traced or allocated to each division based on sales and actual division costs. Company- wide administrative costs are allocated based on sales; advertising and marketing costs are directly traced to each division. The online sales staff and product representatives are paid on commission; whereas the factory store sales staff are salaried and jobs would be eliminated if division was closed. For the last few years, the factory store has barely broken even and is operating at a loss. Based on the information in the most recent report, management must decide whether to keep the factory store open. After completing your analysis using Exhibit 5C, state your recommendations