Question 2: (18 marks) George Ltd manufactures and directly sells three products: B1, B2 and B3. Its budgetary information is as follows: Unit production and sales Batch size (units per batch) Number of direct online customers Selling price per unit Direct material per unit Direct labour hours per unit Hourly rate for labour (S/hour) Variable selling cost per unit Variable overhead per unit Inspection costs per batch Customer-level costs (per customer) B1 5000 500 50 $160 $78 0.2 $20 $10 $15 $180 $180 B2 3600 400 30 $210 $72 0.3 $20 $6 $13 $150 $180 B3 2500 250 20 $280 $150 0.4 $20 $11 $20 $100 $180 For the coming year, the company's: Fixed manufacturing facility level cost is budgeted at $400,000 Fixed selling and administrative costs are budgeted at $320,000 There is no beginning or ending inventory maintained. Tax rate is 33% Required: a. Calculate George Ltd's budgeted net profit for the coming year. (12 marks) Click or tap here to enter text. Required: a. Calculate George Ltd's budgeted net profit for the coming year. (12 marks) Click or tap here to enter text. b. Assuming the sales mix remains as budgeted, determine how many units of each product George Ltd must sell in order to earn an after-tax profit of $320,000. (6 marks) Click or tap here to enter text. Focu . the vacant factory space will be rented out for $24,000 per year. the quality control inspection hours are likely to be doubled. the existing production clerk will be transferred to the purchasing unit. the waste per unit is likely to increase by three times. . If this deal for F-50 is managed successfully, the company may close down the manufacturing operations and become a distributor for this product . This has got the employees worried. Required: Prepare an analysis of all relevant costs to determine whether Archie Ltd should manufacture 50,000 units of F-50 or purchase from the overseas supplier in 2016 and beyond. Click or tap here to enter text. Com 8 10 11 12 13 14 15 16 17 Fixed overhead per unit $40 $50 Currently, the sales staff is paid a flat salary amounting to $75,000 per year and the operational expenses for each product amount to $5,000. Jonathan Ltd's objective is to earn high profit and keep the sales staff motivated. The company is keen to arrive at a decision will meet both criteria. The management is considering a change to a performance-based system. Two plans are being considered: Plan 5,000 units Expected sales mix: B1 - 25%B2- 75% Sales staff to be paid The operational 10% commission based expenses for each on gross sales. product amount to $5,000. 00 Plan 5,000 units Expected sales B mix: B1 - 80% B2- 20% Sales staff to be paid The operational 30% commission based expenses for each on product contribution product amount to margins. $5,000. Required: Given the current situation and the two plans, what do you recommend to Jonathan Ltd? Explain and show all supporting calculations under the current situation and the two plans. Click or tap here to enter text. balia) Focus Required: Should Roxy Ltd invest in the new equipment? Answer on the basis of your calculations Calculate the following for the proposed investment, the after tax: a. Net present value (14 marks) Click or tap here to enterte b. Internal Rate of Return (5 marks) Click or tap here to enter text. c. Accounting Rate of Return (5 marks) Click or tap here to enter text
