question 1

Rooney Company makes fine jewelry that it sells to department stores throughout the United States, Rooney is trying to decide which of the two bracelets to manufacture. Cost dato pertaining to the two choices follow Cost of materials per unit Cost of labor per unit Advertising cost per year Annual depreciation on existing equipment Bracelet Bracelet D $ 41 5 46 37 8,900 6,200 6,900 4,600 37 + nces Required a. Identify the fixed costs and determine the amount of fixed cost for each product b. Identify the variable costs and determine the amount of variable cost per unit for each product c. Identify the avoidable costs and determine the amount of avoidable cost for each product Complete this question by entering your answers in the tabs below. Required Required Required Identify the fixed costs and determine the amount of fixed cost for each product, Bracelet Fixed Costs Bracelet a. Identify the fixed costs and determine the amount of fixed cost for each product. b. Identify the variable costs and determine the amount of variable cost per unit for each product. c. Identify the avoidable costs and determine the amount of avoidable cost for each product. Complete this question by entering your answers in the tabs below. OK ences Required A Required B Required Identify the fixed costs and determine the amount of fixed cost for each product. Fixed Conts Bracelet Bracelet B Total fixed costs a. Identify the fixed costs and determine the amount of fixed cost for each product. b. Identify the variable costs and determine the amount of variable cost per unit for each product c. Identify the avoidable costs and determine the amount of avoidable cost for each product Complete this question by entering your answers in the tabs below. + Required A Required B Required Identify the variable costs and determine the amount of variable cost per unit for each product Variable Costs Bracelet A Bracelets nces Total variable costs per unit a. Identify the fixed costs and determine the amount of fixed cost for each product b. Identity the variable costs and determine the amount of variable cost per unit for each product c. Identify the avoidable costs and determine the amount of avoidable cost for each product. Complete this question by entering your answers in the tabs below. Required A Required B Required Identify the avoidable costs and determine the amount of avoidable cost for each product. Avoidable Costs Bracelet A Bracelet B Adams Company manufactures a personal computer designed for use in schools and markets it under its own label. Adams has the capacity to produce 28,000 units a year but is currently producing and selling only 14,000 units a year. The computer's normal selling price is $1,770 per unit with no volume discounts. The unit-level costs of the computer's production are $400 for direct materials, $250 for direct labor, and $170 for indirect unit-level manufacturing costs. The total product and facility-level costs incurred by Adams during the year are expected to be $2,180,000 and $802,000, respectively. Assume that Adams receives a special order to produce and sell 3,160 computers at $1.260 each. Required Calculate the contribution to profit from the special order, Should Adams accept or reject the special order? Contribution to pront Should Adams accept or reject the special order? Rundie Bicycle Manufacturing Company currently produces the handlebars used in manufacturing its bicycles, which are high-quality racing bikes with limited sales. Rundle produces and sells only 6,400 bikes each year. Due to the low volume of activity, Rundle is unable to obtain the economies of scale that larger producers achieve. For example, Rundle could buy the handlebars for $32 each they cost $35 each to make. The following is a detailed breakdown of current production costs. Item Unit-level costs Unit Cont Total Materials $16 $102,400 Labor 8 51,200 Overhead 2 12,800 Allocated facility-level costa 9 57.600 Total 335 $224,000 After seeing these figures, Rundle's president remarked that it would be foolish for the company to continue to produce the handlebars at $35 each when it can buy them for $32 each. Required Calculate the total relevant cost. Do you agree with the president's conclusion? Total Per Unit Total relevant cost Do you agree with the president's conclusion A machine purchased three years ago for $302,000 has a current book value using straight-line depreciation of $189,000; its operating expenses are $32,000 per year. A replacement machine would cost $226,000, have a useful life of ten years, and would require $13,000 per year in operating expenses. It has an expected salvage value of $63,000 after ten years. The current disposal value of the old machine is $ 76,000; if it is kept 10 more years, its residual value would be $15,000 Required Calculate the total costs in keeping the old machine and purchase a new machine. Should the old machine be replaced? Purchase New Machine Keep Old Machine Total costs Should the old machine be replaced? Se HO Benson Company operates three segments. Income statements for the segments imply that profitability could be improved If Segment A were eliminated BENSON COMPANY Income Statements for Year 2 Segment Sales Cost of goods sold Sales commissions Contribution margin Ceneral fixed operating expenses (allocation of proident's salary) Advertising expense (specific to individual divisions Net Income (loss) B $ 166,000 $ 237,000 (129,000) (83,000) (16,000) (23,000) 21,000 131,000 (43,000) (39,000) (6.000) (18,000) $ (28,000) $ 74,000 c $262.000 (87,000) (26.000) 149,000 (25,000) 0 $124,000 Required a. Prepare a schedule of relevant sales and costs for Segment A. b. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A Complete this question by entering your answers in the tabs below. Required A Required B a. Prepare a schedule of relevant sales and costs for Segment A b. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. Complete this question by entering your answers in the tabs below. Required A Required B Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. BENSON COMPANY Comparative Income Statements for the Year 2 Decision Keep Seg. A Eliminate Seg. A Sales Cost of goods sold Sales commissions Contribution margin $ 0$ General fixed operating expenses Advertising expense Net Income $ 0$ 0