Part 2 contains 3 Decision making recommendations that are independent of each other. This part covers...

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Part 2 contains 3 Decision making recommendations that are independent of each other. This part covers material in Module 17. Decision Making #1-Special Order Snider, Inc., which has excess capacity, received a special order for 3,500 units at a price of $14 per unit which it could produce with the excess capacity. Current production and sales are anticipated to be 10,000 units without considering the special order. Total Cost of Goods Sold below includes $20,000 of fixed manufacturing cost. Below is budget information for the current year sales of 10,000 units follows. Sales Less: Cost of Goods Sold Gross Margin Required: $200,000 120,000 $80,000 If the special order is accepted, calculate the specific change in income for only the special order. Make sure you show your work. Provide a recommendation to management if the company should accept or reject this special order. Explain in detail your recommendation to management including the change to income that applies to the special order. Decision Making #2-Sell or Process Further Joint Product Decision Lido manufactures A and B from a joint process cost = $18,000. Six thousand pounds of A can be sold at split-off for $20 per pound or processed further at an additional cost of $9,000 and then sold for $21. Seven thousand pounds of B can be sold at split-off for $12 per pound or processed further at an additional cost of $14,000 and later sold for $19. Required: Which products should be processed further or not? Why? Give the total dollar change in income for each product based on your recommendation. Make sure you show your work. Decision making #3-Use of Limited Resources-Singe Constraint Bush Manufacturing has the following labor hours available for producing M and N Consider the following information: Required Labor per unit in hours Maximum demand in units Contribution Margin per unit M 25,000 Total Direct labor hours available N 4 3 9,000 10 6,000 6 Required: What is the optimal product mix(how many M and N should be produced)? Explain your answer and show computations to earn credit. Part 2 contains 3 Decision making recommendations that are independent of each other. This part covers material in Module 17. Decision Making #1-Special Order Snider, Inc., which has excess capacity, received a special order for 3,500 units at a price of $14 per unit which it could produce with the excess capacity. Current production and sales are anticipated to be 10,000 units without considering the special order. Total Cost of Goods Sold below includes $20,000 of fixed manufacturing cost. Below is budget information for the current year sales of 10,000 units follows. Sales Less: Cost of Goods Sold Gross Margin Required: $200,000 120,000 $80,000 If the special order is accepted, calculate the specific change in income for only the special order. Make sure you show your work. Provide a recommendation to management if the company should accept or reject this special order. Explain in detail your recommendation to management including the change to income that applies to the special order. Decision Making #2-Sell or Process Further Joint Product Decision Lido manufactures A and B from a joint process cost = $18,000. Six thousand pounds of A can be sold at split-off for $20 per pound or processed further at an additional cost of $9,000 and then sold for $21. Seven thousand pounds of B can be sold at split-off for $12 per pound or processed further at an additional cost of $14,000 and later sold for $19. Required: Which products should be processed further or not? Why? Give the total dollar change in income for each product based on your recommendation. Make sure you show your work. Decision making #3-Use of Limited Resources-Singe Constraint Bush Manufacturing has the following labor hours available for producing M and N Consider the following information: Required Labor per unit in hours Maximum demand in units Contribution Margin per unit M 25,000 Total Direct labor hours available N 4 3 9,000 10 6,000 6 Required: What is the optimal product mix(how many M and N should be produced)? Explain your answer and show computations to earn credit.