Question 2 125%! Mojo Co. is considering three regions for the manufacturing site of its new product: Indonesia, Mexico, and Canada. The product will be sold to retail outlets in Canada at $435!] per unit. These retail outlets add their own markup when selling to nal customers. The three countries differ in their fixed costs and variable costs per product. Annual Fixed 'v'ariable 'v'ariable Manufacturing Marketing Costs per Unit and Distribution Costs uer Unit $5 also can $123!: w $4.4 $21-30 $1c soc ccc $19.3c sass Required {show all of your work}: A. Compute the breakeven point of Mojo in both {a} units sold and {b} revenues for each of the three countries considered. E. If Mojo expects to sell 1,350,330 units this year, what is the budgeted operating income for each of the three countries considered? C. What level of sales {in units} would be required to produce the same operating income in Mexico and in Canada? What would be the operating income in Indonesia at that volume of sales? D. What is your decision-making interpretation for each? Question 4 [25% Totara Inc. specializes in low-volume production orders. The three sales representative each receive a base salary plus a bonus based on 32% of the actual profit [gross margin} of each order theyr sell. The bonus used to be 5% of the revenues for each order sold. Actual prot in the revised system was defined as actual revenue minus actual manufacturing cost. Totara uses a three-part classication of manufacturing costs direct materials. direct manufacturing labour, and indirect manufacturing costs. Indirect manufacturing costs are determined as 330% of actual direct manufacturing labour cost. The sales manager receives a report on the XYZ job and is disappointed with its low prot. The three sales representatives share details of their most recentjobs. lCustomer WAT lel P X'r'E Direct materials Direct manuf. labour $48 Indirect manufacturing Direct labour-hours _-_ The sale representatives ask the manufacturing manager to explain the different labour costs charged on the IWAT and XYZjobs, given both used two direct Iabounhours. The answer. the XYZ. not a rush job. was done in overtime and the actual rate {$35} was 50% higher than the $24 per hour straight-time rate. In contrast. the WAT job was a \"rush\" order to be done by noon the day after receiving the order. The \"actual cost" charged to the XYZ job was the $24 per hour straight-time rate. Required {show all of your work}: A. Using both actual straight-time and overtime rates paid for direct labour. what is the actual prot Totara would report on each of the three jobs? B. Assume that Totara charges $24 straight-time direct labour rate for each job {a nd the indirect-manufacturing rate of 2% includes an overtime premium}. What would be the revised prot they would report for each of the three jobs? Comment on anyr differences from requirement 1. C. Discuss the pros and cons of charging the X'r'Z job the $35 labour rate per hour. D. Why might Totara adopt the 2% prot incentive instead of the prior 5% of revenue incentive? How might DMI dene prot to reduce possible disagreements with its sales representatives? ACCT5002 - Managerial Accounting Your individual assignment submission must be typed in Excel and uploaded (one file only) to the assignment drop-box by the due date and time. One worksheet (tab) for each question labelled properly. Audit trails (show your work at least once) required for work to receive marks. Formatting, organization, and clarity will be evaluated. Question 1 (25%) A manufacturing corporation has the following financial information for the year: Inventory Balances: Beginning Ending Work in Progress $ 90,000 $ 80,000 Finished Goods $ 77,000 $ 67,000 Raw Materials $ 10,000 $ 10,000 During the year, the budgeted and actual costs were as follows: Note Budget Actual Raw Materials 1 310,000 290,000 Labour 2 540,000 520,000 Depreciation Factory Equipment 72,000 72,000 Depreciation Office Equipment 24,000 24,000 Building Rent 3 100,000 100,000 Maintenance - Factory Equipment 60,000 40,000 Utilities - Electrical 4 200,000 180,000 Utilities - Gas 100,000 90,000 Utilities - Telecom 20,000 22,000 Sales Commissions 40,000 30,000 Advertising 30,000 20,000 Shipping 7 20,000 16,000 Sales for the year were $1,500,000 Note 1 - Raw material For both budget and actual materials: 90% of raw materials are traced directly to specific jobs and remaining 10% of raw materials are used throughout the production process and not traced. $290,000 in materials purchased in the year.Note 2 - Labour Budget: Direct Labour $300,000 + Factory Salaries $80,000 + Head Office Salaries $160,000 = $540,000 Actual: Direct Labour $270,000 + Factory Salaries $85,000 + Head Office Salaries $163,000 = $518,000 Note 3 - Building Rent The building is shared between the factory and the administrative office. 68% of the building is related to the factory, and the remaining 32% is related to the administrative office. Note 4 - Utilities Electrical 90% of these costs are related to the factory, and 10% of these costs are related to the administrative office Note 5 - Utilities - Gas All of the Gas is used to heat production equipment. Note 6 - Utilities - Telecom All of the Telecom costs are for sales people. Note 7 - Shipping 60% of the shipping costs are to bring raw materials to the plant. The other 40% of shipping costs are to ship finished goods to customers. (For simplicity, assume that all of the in-coming shipping costs are indirect costs and are therefore allocated to overhead.) Note 8 - Overhead The manufacturer uses Normal Costing. Overhead is allocated based on Direct Labour costs. Any under/over applied overhead is allocated to Cost of Goods Sold. Required (show all of your work): A. Calculate Cost of Goods Manufactured (clearly explain if required) B. Calculate Cost of Goods Sold and an income statement (clearly explain if required) C. Provide a professional assessment and interpretation (reasonable assumptions allowed)Question 3 (25%) Given the following information: Deluxe Homes is a residential Home Builder. It costs the company $99,000,000 to build 300 homes per year. Based on their current production of 300 homes per year, their costs per unit are: (% costs per home) Direct labour 7% Direct materials 60% Variable overhead 9% Fixed overhead 15% Variable selling costs 4% Fixed selling costs 5% Required (show all of your work): A. What is the cost per unit if production is increased to 400 homes per year, and there is an increase of $3.50 million in total fixed costs? B. What is the cost per unit if production is decreased to 270 homes per year, and there is a decrease of $2.15 million in total fixed costs? C. What is your decision-making interpretation for part A and B? D. What profit or loss will occur if the company sells a home for $525,000, the company experiences a 5% increase in variable expenses, a 20% increase in fixed costs, and will incur $50M for land to build the homes. The company wants your recommendation. E. If the company wants a 2.5% operating profit based on the information provided, what will need to change and what would you recommend the company to do