Option 1 Managerial Decision Making Group Assignment 1 (5 Marks) 20 marks Identify 3 of the 5 differences between the roles of Financial Accounting and Managerial Accountants (6 marks) 1. 2. 3. Product costs are easily traceable to a product (2 marks) True ? False? Only variable costs are differential cost (2 marks) True ? False? A sunk cost can be a variable cost (2 marks) True? False? Within the relevant range the product cost per unit is constant (2 mark) True? False? Opportunity costs are not recorded in the books of accounts (2 mark) True? False? Is this item a variable cost? (1 mark) Yes ? No ? Output 950 units 925 units 900 units 850 units Total Cost $2,023.50 $1,970.25 $1,917.00 $1,810.50 Explain - Maximum 3 lines or 30 words. (3 marks)Option 1 30 marke The Pillow Company's relevant range of production is 7.500 units to 12.500 units. When it produces and sells 10,000 units, its average costs per unit are as follows: Average Cost Per Unit Direct materials 6.00 $ 3 50 Direct labor Variable manufacturing overhead 1.50 Fixed manufacturing overhead 4.00 Fixed selling expense $ 3.0 Fixed administrative expense 2.00 Sales commissions 1.00 Variable administrative expense 1.00 For financial accounting purposes, what is the total product cost of 8,000 units? (6 marks) If the selling price per unit is $33, what is the net operating Income when 10,000 units are produced and sold? (6 marks) What is the break-even amount in units and sales dollars? (6 marks) Marketing is proposing to decreases selling price by $2, and increase advertising cost increase by $2,000. They expect sales increase by 15% as a result of this initiative. Will you recommend this course of action? Provide supporting calculations for your recommendation. (6 marks) A new competitor is entering the market with an aggressive campaign to acquire market share from existing companies operating in the space. It is estimated that the new company will erode up to 15% of all current sales. The board of directors is strategizing about how to respond to this challenge and asked you to provide a measure of how much sales loss the company can withstand before it starts making a loss? What measure would you provide and show the supporting calculations. (6 marks)