Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Managerial Accounting Question 1: The following is the income statement of Giza Co. for the period ended December 31, 2011: Description Product X Product Y

Managerial Accounting

Question 1:

The following is the income statement of Giza Co. for the period ended December 31, 2011:

Description

Product X

Product Y

Product Z

Total

Sales Revenue

  • Variable cost

60,000

40000

90,000

?

50,000

34000

Contribution margin

  • Avoidable fixed cost
  • Unavoidable fixed cost

?

0

10,000

20,000

8,000

15,000

?

20,000

5000

Net income (loss)

?

?

?

Required:

  1. Complete the income statement
  2. Do you advise the company to delete any product? Justify.
  3. Prepare the income statement in case of deleting a product.
  4. If the company can increase the sales of all products by 20%, do you still advice the company to delete any product? Justify.

Question 2:

The normal price per unit $120

Total cost per unit $90 (70% variable cost)

A customer from Nigeria would like to import 3000 units to sell in Bahrain for price $70 per unit.

The maximum capacity is 20,000 units

The local demand is 15,000 units.

Do you advise the company to accept this special order? Justify your answer?

If the customer seeks to receive the goods in Bahrain, and the cost of shipping is $8 per unit, do you advise the company to accept the offer in this case? Justify.

Question 3:

A company produces Cars, and purchasing the wheels for $ 100 per unit.

The management thinks to produce the wheels instead of purchasing it.

The cost of producing is as follows:

Variable cost $40

Fixed cost:

New fixed cost to rent new equipment to produce the battery $250,000

General fixed cost (old fixed cost) $100000.

The quantity of wheels 5000

Do you advice the company to produce the wheels or not? Justify?

Question 4:

Cairo Co. can produce 3 products A, B & C; the following data is estimated to help in preparing the production plan for the coming period to maximize the profit:

A

B

C

Price

$ 30

$50

$30

Variable cost

$ 18

35

20

Demand (maximum sales)

2000 units

4000 units

5000 units

Machine hours per unit

4 hours

3 hours

5 hours

Machine hours per unit

3

5

2

The fixed cost for the Co. is $10000 regardless the production plan.

The total machine hours are 30,000 hours (maximum capacity).

Required:

1- Prepare the production plan.

2- Prepare the income statement (Fixed cost is allocated according the sales revenue).

Question 5:

Total cost per unit $150

Compute the price in case of:

  1. The price equal cost plus 25% of cost
  2. The price equal cost plus 25% of price
  3. The price that achieves return on assets 15% (total assets 3000.000 and the quantity of sales 100.000 units)

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

Wiley CIA Essentials Of Internal Auditing Part 1 Exam Review 2023

Authors: S. Rao Vallabhaneni

1st Edition

1119987148, 978-1119987147

More Books

Students also viewed these Accounting questions