Old MathJax webview

Old MathJax webview

I want to apply it to excel

I want to apply it to Excel And send me the file after the application on Excel

I want to apply it to Excel And send me the file after the application on Excel

Product "T" is Discontinued Particulars R s T Total Sales Revenue 820,000.00 660 000 00 1.480.000.00 Variable Expenses:- Direct Materials 320,000.00 250,000.00 570,000 00 Direct Wages 190,000.00 230,000 00 420,000.00 Selling & Admn Expenses 50,000.00 40 000 00 90,000.00 Total Variable Expenses 560,000.00 520,000 00 1.080,000 00 Contribution 260.000,00 140,000.00 400,000.00 Fixed Expenses:- Production Overheads 90,000.00 50,000.00 90,000.00 230,000.00 Selling & Admin Expenses 100,000.00 40,000.00 40,000.00 180,000.00 Total Fixed Expenses 190,000.00 90,000.00 130,000.00 410,000.00 Operating Income!(Loss) 70,000.00 50,000.00 (130.000 00) (10,000,00) Note: Fixed Costs needs to be incurred whether the product is manufactured or not and hence these costs remain same in both cases, if Product is discontinued it will result in toss of 90,000 (80,000 - (10,000) So, it is recommended not to discontinue Product T Eixation of Minimum Price for the new order could be sold to the local schools S.No Particulars Amount a Direct Labour 180,000.00 | Direct Material 60,000.00 c Selling Costs d Special Machine 20,000.00 e Opportunity Cost-Contribution Lost from Discontinuing 90,000.00 Total Cost Incurred 350,000.00 Mallett ple has the following income and expense statement based on absorption costing principles: Product: R S Total 000s 000s 000s 000s 820 660 450 1.930 Revenues Less: Direct Materials Direct Wages Production overheads (fixed) Gross Margin Selling & admin overheads: Variable Fixed Net Profit 320 190 90 220 250 230 50 130 150 180 90 30 720 600 230 380 50 100 40 40 30 40 120 180 70 50 (40) 80 From the above information, the Managing Director has suggested that the company discontinues product T. This does mean there will be spare capacity in the factory but the MD suggests there is no point in using resources to make a product which is making a loss. However the company has been approached by a local school which is interested in Mallett producing a special "one-off" order for them, but would like the price to be kept as low as possible. The company could undertake the order if it stopped producing product T. The new order would need the existing direct labour used for product T and would also use 60,000 of direct materials. The order could be produced on the existing machines in the factory, apart from one special machine that would need to be hired costing 20,000. There would be no selling costs incurred. Required: Re-draft the above information to provide a more useful statement and consider the various options available to Mallett plc. You should include a calculation of the minimum price at which the new order could be sold to the local school