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please give the answer in 10 minutes Question#01: (1+3+4=8) (a) If a product is generating a loss, then it should be discontinued. Do you agree?
please give the answer in 10 minutes
Question#01: (1+3+4=8) (a) "If a product is generating a loss, then it should be discontinued." Do you agree? Explain. (b) Walton Company manufactures 30,000 units of Motor for use on its production line of producing Refrigerator. At this level of activity, the cost per unit for part Motor is: Direct materials. Direct labor Variable manufacturing overhead Fixed manufacturing overhead, Traceable. Fixed manufacturing overhead, Common Total cost per part $ 3.60 10.00 2.40 5.00 4.00 $25.00 An outside supplier has offered to sell 30,000 units of Motor each year to Han Products for $21 per part. Assuming that the company has no alternative use for the facilities that are now being used to produce the carburetors, should the outside supplier's offer be accepted? Show all computations. (c) Persona Beauty Parlor is a company that provides services of beautification. It has two divisions: hair care, skin care. Following is an extract from the financial statements for the year ending 31 December 2014: Skin Care Hair Care Revenue $900 $600 million million In the board meeting Net $210 ($50) summoned for review of financial statements, income/(loss) million million a director proposed that the company should dispose of the hair care division because it is losing money. The CEO argued that the board can't conclude that a segment is losing money just because it generated net loss for a period. She suggested that the company's chief financial officer should conduct a detailed analysis for presentation in the next board meeting. Being the company's management accountant, the CFO asked you to identify which of the following costs are relevant & irrelevant for the decision: 1. CEO's salary 2. Salaries of Hair Care workers who can be laid-off 3. Cost of materials needed by Hair care division 4. Annual directors' fee 5. Salary of the Hair Care chief operating officer 6. Company-wide quality certification fee 7. Head office rentStep by Step Solution
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