Midterm $1-$What is the deal?" is a company in West Windsor, NJ operated by Pam Smith. The company

has two activities. Here are the facts:

A$.$ Subscriptions:

The company provides maintenance of the equipment including back$-$ups and charges $$50$ weekly.

B$.$ Technical repairs:

These repair services are priced $$100$ per hour plus materials. The materials are charged $20\%$ over the

purchase price and the employees are paid $$30$ per hour. The overhead for $2024$ was estimated to be

$$20,000,$ and the estimated hours of labor $2,000.$ The company allocates the costs based on the number

of hours of labor.

Durante the first week of January they sold $10$ subscriptions and received four computers to be

repaired. The maintenance required $1$ hour each. The information about orders is attached:

Determine the total cost of serving each client.

Calculate the profitability of each order and the profitability of the subscriptions.

In the following chart you will find the expenses when Sheldon Shirts produces and sells $10,000$ shirts:

a$.$ Compute:

Direct materials.

Direct labor.

Fixed Manufacturing overhead.

Variable manufacturing overhead.

Total manufacturing costs.

Prime cost.

Conversion cost.

Fixed period cost.

Variable period cost.

b$.$ Calculate the break$-$even point in units and verify the BEP.

c$.$ How much dollars would they have to sell to get a $$90,000$ profit?

d$.$ What is the margin of safety in percentage of sales? What does it mean?

e$.$ If the sales increase by $5\%,$ how much will the income increase in dollars?

f$.$ The company is considering using a different material that costs $10\%$ more but will allow them

to reduce the manufacturing fixed costs by $5\%.$ Should they change?

g$.$ If they accept the changes in $f,$ how many units do they have to sell to break even?

Write the report addressed to the production manager indicating if the company should change the

material or not. Provide a summary of your analysis.

In the following chart you will find the expenses when Sheldon Shirts produces and sells $10,000$ shirts:

a$.$ Compute:

Direct materials.

Direct labor.

Fixed Manufacturing overhead.

Variable manufacturing overhead.

Total manufacturing costs.

Prime cost.

Conversion cost.

Fixed period cost.

Variable period cost.

b$.$ Calculate the break$-$even point in units and verify the BEP.

c$.$ How much dollars would they have to sell to get a $$90,000$ profit?

d$.$ What is the margin of safety in percentage of sales? What does it mean?

e$.$ If the sales increase by $5\%,$ how much will the income increase in dollars?

f$.$ The company is considering using a different material that costs $10\%$ more but will allow them

to reduce the manufacturing fixed costs by $5\%.$ Should they change?

g$.$ If they accept the changes in $f,$ how many units do they have to sell to break even?

Write the report addressed to the production manager indicating if the company should change the

material or not. Provide a summary of your analysis.