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please help with answers from question 1 to 6 Question 1 Located on Swiftcurrent lake in Glacier National Park, Many Glacier Hotel was built in
please help with answers from question 1 to 6
Question 1 Located on Swiftcurrent lake in Glacier National Park, Many Glacier Hotel was built in 1915 by the Great Northern Railway. In an effort to supplement its lodging revenue, the hotel decided in 20x1 to begin manufacturing and selling small wooden canoes decorated with symbols hand painted by Native Americans living near the park. Due to the great success of the canoes, the hotel began manufacturing and selling paddles as well in 20X3. Many hotel guests purchase a canoe and paddles for use in self-guided tours of Swiftcurrent Lake. Because production of the two products began in different years, the canoes and paddles are produced in separate production facilities and employ different labourers. Each canoe sells for R500 and each paddle sells for R50. A 20x3 fire destroyed the hotel's accounting records. However, a new system put into place before the 20x4 season provides the following aggregated data for the hotel's canoe and paddle manufacturing and marketing activities: Manufacturing Data: Year Number of Total Canoe Year Canoes Manufacturing Manufactured Costs Number of Paddles Manufactured Total Paddle Manufacturing Costs 20X9 250 20x9 900 R103 000 R128 000 20x8 20x8 1 200 R38 500 R49 000 R44 000 275 240 310 350 400 20X7 20X6 20X7 20X6 20XS 20x4 1 000 1 100 R108 000 R114 000 R141 500 R140 000 R45 500 R52 000 20X5 1 400 20X4 1 700 R66 500 Marketing Data: Year Number of Total Canoe Year Canoes Manufacturing Manufactured Costs 20X9 250 R45 000 20x9 20X8 275 R43 000 20x8 20X7 240 R44 000 20X6 310 R51 000 20X6 20X5 350 R62 000 20X5 Number of Total Paddle Paddles Manufacturing Manufactured Costs 900 R7 500 1 200 R9 000 1 000 R8 000 1 100 R8 500 1 400 R10 000 1 700 R11 500 20x7 20X4 400 R60 000 20X4 Required: 1.1 High-Low Cost Estimation Method a. Use the high-low method to estimate the per-unit variable costs and total fixed costs for the canoe product line. Use the high-low method to estimate the per-unit variable costs and total fixed costs for the paddle product line. b. 1.2 Cost-Volume-Profit Analysis, Single-Product Setting Use the CVP analysis to calculate the break-even point in units for: a. The canoe product line only The paddle product line only b. 3. Cost-Volume-Profit Analysis, Multiple-Product Setting The hotel's accounting system data shows an average sales mix of approximately 300 canoes and 1 200 paddles each season. Significantly more paddles are sold relative to canoes because some inexperienced canoe guests accidentally break one or more paddles, while other guests purchase additional paddles as presents for friends and relatives. In addition, for this multiple-product CVP analysis, assume the existence of an additional R30 000 of common fixed costs for a customer service hotline used for both canoe and paddle customers. Use CVP analysis to calculate the break-even point in units for both the canoe and product lines combined. 4. Cost classification a. Classify the manufacturing costs, marketing costs, and customer service hotline costs either as product or period costs. For the period costs, further classify them into either selling expenses or general and administrative expenses. b. 5. Sensitivity Cost-Volume-Profit Analysis and Production versus Period Costs, Multiple-Product Setting If both the variable and fixed production costs (refer to you answer to Requirement 1) associated with the canoe product line increased by 5% (beyond the estimate from the high-low analysis), how many canoes and paddles would need to be sold in order to earn target income of R96 000? Assume the same sales mix and additional fixed costs as in Requirement 3. 6. Margin of Safety Calculate the hotel's margin of safety (both in units and in sales Rands) for Many Glacier Hotel, assuming the same facts as in Requirement 3, and assuming that it sells 700 canoes and 2 500 paddles next yearStep by Step Solution
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