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Please please help me with this? The assignment is attached and I dont know how to approach this ASSIGNMENT 2 - Part1 Enpaz Ltd manufactures
Please please help me with this? The assignment is attached and I dont know how to approach this
ASSIGNMENT 2 - Part1 Enpaz Ltd manufactures and sells DVD players and digital cameras. They have been in the business for several years. The following is an income statement for 2002 as prepared by the accounting clerk. Revenue Direct Materials Direct Labor Machining Maintenance Utilities Management Factory; lease, insurance, security Total Costs Net Income $4,451,600 $1,178,400 402,690 491,100 612,000 245,500 340,000 1,110,000 (4,379,690) $71,910 As the new management accountant you have conducted several interviews and learned the following: 1) Utilities are primarily comprised of electricity. The company uses solar power for lighting and heating. 2) The plant is operating at 72% of capacity based on space. 3) The machines are operating at 84% of capacity. 4) The insurance of $110,000 is for theft and fire. 5) The security guards are hired from a security company and paid by the hour. 6) The factory lease is for ten years and the amount is $900,000 per annum. The company employs two engineers who are each responsible to ensure quality control for one of the products; the DVD engineer is paid $50,000 and the Camera engineer is paid $80,000. The firm also employs a manager for the DVD division who is paid $90,000. The Camera division is managed by the CEO who spends 25% of her time managing this product. The CEO's is paid $120,000 per annum. Activity reports for 2002: Units produced & sold Machine hours Labor hours Space used Number of Orders Production run capacity Types of cleaning supplies DVD 9,810 980 2,940 30% 21 200 8 Camera 13,100 3,930 10,480 42% 34 200 10 Total 22,910 4,910 13,420 72% 55 N/A 18 Maintenance is performed prior to each production run. Enpaz Ltd. has contracted Aficion Ltd to perform this activity since it is very technical, involving specialized parts and equipment. The total direct labor hours for the year was 13,423. The production of one Camera uses 48 minutes (0.8 hour) of labor while the DVD player takes 18 minutes (0.3 hour). Direct Material costs for the Camera are $60 per unit. Demand for 2003 is expected to be similar to 2002. REQUIRED a) The CEO has requested that you use ABC to determine the cost of a DVD player based on 2002 production volume? (for purposes of part \"a\" allocate all of the costs between DVD and Camera). Show a detailed calculation. (12 marks) Cost per DVD Direct Materials Direct labor Machining Maintenance Utilities Management Factory lease insurance, security b) What is the maintenance cost associated with the production of 300 Cameras? Show calculation. (3 marks) c) During 2003 a movie production company has requested 380 DVD players for their set. You want the \"free marketing\" that this will provide so you are willing to offer them 380 DVD players at a price equal to your \"cost\". What is the most competitive price you will offer for the 380 DVD unitsStep by Step Solution
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