Q1.

Kristen Lu purchased a used automobile for $15,850 at the beginning of last year and incurred the following operating costs: Depreciation ($15, 850 + 5 years) $ 3, 170 Insurance $ 1, 600 Garage rent $ 800 Automobile tax and license $ 430 Variable operating cost $ 0. 12 per mile The variable operating cost consists of gasoline, oil, tires, maintenance, and repairs. Kristen estimates that, at her current rate of usage, the car will have zero resale value in five years, so the annual straight-line depreciation is $3,170. The car is kept in a garage for a monthly fee. Required: 1. Kristen drove the car 15,000 miles last year. Compute the average cost per mile of owning and operating the car. Note: Round your answers to 2 decimal places. Average fixed cost per mile Variable operating cost per mile Average cost per mile $ 0.002. Kristen is unsure about whether she should use her own car or rent a car to go on an extended cross-country trip for two weeks during spring break. What costs above are relevant in this decision? Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect. Variable operating costs ? Depreciation ? Automobile tax ? License costs ? Insurance costsTroy Engines, Limited, manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Limited, for a cost of $34 per unit. To evaluate this offer, Troy Engines, Limited, has gathered the following information relating to its own cost of producing the carburetor internally: Per 21, 000 Units Unit Per Year Direct materials $ 14 $ 294, 000 Direct labor 12 252, 000 Variable manufacturing overhead 2 42, 000 Fixed manufacturing overhead, traceable 9* 189, 000 Fixed manufacturing overhead, allocated 12 252, 000 Total cost $ 49 $ 1, 029, 000 *One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value). Required: 1. Assuming the company has no alternative use for the facilities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 21,000 carburetors from the outside supplier? 2. Should the outside supplier's offer be accepted? 3. Suppose that if the carburetors were purchased, Troy Engines, Limited, could use the freed capacity to launch a new product. The segment margin of the new product would be $210,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 21,000 carburetors from the outside supplier? 4. Given the new assumption in requirement 3, should the outside supplier's offer be accepted? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Assuming the company has no alternative use for the facilities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 21,000 carburetors from the outside supplier?Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Should the outside supplier's offer be accepted? Should the outside supplier's offer be accepted?Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Suppose that if the carburetors were purchased, Troy Engines, Limited, could use the freed capacity to launch a new product. The segment margin of the new product would be $210,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 21,000 carburetors from the outside supplier?Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Given the new assumption in requirement 3, should the outside supplier's offer be accepted? Given the new assumption in requirement 3, should the outside supplier's offer be accepted?Imperial Jewelers manufactures and sells a gold bracelet for $406.00. The company's accounting system says that the unit product cost for this bracelet is $263.00 as shown below: Direct materials $ 142 Direct labor 87 Manufacturing overhead 34 Unit product cost $ 263 The members of a wedding party have approached Imperial Jewelers about buying 21 of these gold bracelets for the discounted price of $366.00 each. The members of the wedding party would like special filigree applied to the bracelets that would increase the direct materials cost per bracelet by $9. Imperial Jewelers would also have to buy a special tool for $456 to apply the filigree to the bracelets. The special tool would have no other use once the special order is completed. To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $10.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes that accepting this order would have no effect on its ability to produce and sell jewelry to other customers. Furthermore, the company could fulfill the wedding party's order using its existing manufacturing capacity. Required: 1. What is the financial advantage (disadvantage) of accepting the special order from the wedding party? 2. Should the company accept the special order? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) of accepting the special order from the wedding party?Complete this question by entering your answers in the tabs below. Required 1 Required 2 Should the company accept the special order? Should the company accept the special order?Outdoor Luggage, Incorporated, makes high-end hard-sided luggage for sports equipment. Data concerning three of the company's most popular models appear below. Ski Guard Golf Guard Fishing Guard Selling price per unit $ 300 $ 380 $ 225 Variable cost per unit $ 160 $ 170 $ 75 Plastic injection molding machine processing time required to produce one unit 7 minutes 6 minutes 4 minutes Pounds of plastic pellets per unit 11 pounds 13 pounds 6 pounds Required: 1. If we assume that the total time available on the plastic injection molding machine is the constraint in the production process, how much contribution margin per minute of the constrained resource is earned by each product? 2. Which product offers the most profitable use of the plastic injection molding machine? 3. If we assume that a severe shortage of plastic pellets has required the company to cut back its production so much that its new constraint has become the total available pounds of plastic pellets, how much contribution margin per pound of the constrained resource is earned by each product? 4. Which product offers the most profitable use of the plastic pellets? 5. Which product has the largest contribution margin per unit? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 If we assume that the total time available on the plastic injection molding machine is the constraint in the production process, how much contribution margin per minute ( constrained resource is earned by each product? Note: Round your final answers to 2 decimal places. Ski Guard Golf Guard Fishing Guard Contribution margin per minute of the constrained resource per minute per minute per minuteComplete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Which product offers the most profitable use of the plastic injection molding machine? Product offers the most profitable use of the plastic injection molding machine isRequired 1 Required 2 Required 3 Required 4 Required 5 If we assume that a severe shortage of plastic pellets has required the company to cut back its production so much that its new constraint has become the total available pounds of plastic pellets, how much contribution margin per pound of the constrained resource is earned by each product? Note: Round your final answers to 2 decimal places. Show less Ski Guard Golf Guard Fishing Guard Contribution margin per pound of the constrained resource per pound per pound per poundComplete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Which product offers the most profitable use of the plastic pellets? Product offers the most profitable use of the plastic pellets isComplete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Which product has the largest contribution margin per unit? Product has the largest contribution margin per unit isDorsey Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $310,000 per quarter. For financial reporting purposes, the company allocates these costs to the joint products on the basis of their relative sales value at the split-off point. Unit selling prices and total output at the split-off point are as follows: Product Selling Price Quarterly Output A $ 12.00 per pound 11, 400 pounds $ 6.00 per pound 17,900 pounds $ 18.00 per gallon 2, 600 gallons Each product can be processed further after the split-off point. Additional processing requires no special facilities. The additional processing costs (per quarter) and unit selling prices after further processing are given below: Additional Processing Product Costs Selling Price A $ 52, 470 $ 16.30 per pound $ 74, 345 11.30 per pound $ 27, 460 $ 25.30 per gallon Required: 1. What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? 2. Based on your analysis in requirement 1, which product or products should be sold at the split-off point and which product or products should be processed further? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the financial advantage (disadvantage) of further processing each of the three products beyond the split-off point? Note: Do not round your intermediate calculations. Enter "disadvantages" as a negative value. Product A Product B Product C Financial advantage (disadvantage) of further processingComplete this question by entering your answers in the tabs below. Required 1 Required 2 Based on your analysis in requirement 1, which product or products should be sold at the split-off point and which product or products should be processed further? Product A Product B Product C Sell at split-off point? Process further