Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question:51 Freezing Limited intends to bid-for-a-contract to manufacture a customised-fridge-for-Winter- Limited. The details of the special order are as follows: 1 (a)-The company purchased machinery
Question:51 Freezing Limited intends to bid-for-a-contract to manufacture a customised-fridge-for-Winter- Limited. The details of the special order are as follows: 1 (a)-The company purchased machinery costing $70,000, three years ago, with a carrying amount of $52,000.- 1 (b)-100 tonnes of Material XX-were-in-storage, purchased at $1,800. The order requires 300 kg of Material:XX, which will cost $2,200 per tonne to buy from the supplier. 1 (c)-200 kg of Material:BXX-were purchased for $40 per kg. Material.BXX-will-cost $45 per kg to replace. The project requires-600 kg-of-BXX. 1 (d) Freezing Ltd can manufacture a-steel component for the special order at a variable cost of $100. If this is-sub-contracted, it will cost $90 per component. 1 (e) >The order requires the production employees to be paid $80 per hour. The current rate is $40 per hour. The employees work-40 hours per week. I (f)-Additional machinery to be purchased for the order is $300,000. 1 Required (a)-Discuss how you will-treat the costs. (a) to (f) above for the special order. Your discussions should use terminologies such as-sunk costs, and relevant costs, etc. 1 1 (b)-Discuss how managers can use the information from the costs and management accounting information in a profit-making organisation
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started