Semester One Final Examinations . 201 ACCT 3104 Management Accounting Question 1 ( 15 Marks ) The Tasmanian Division of McGregor Lid makes and sells tables and beds . The following estimated revenue and cost information from the Division's activity -based costing system is available for 2018 2090 Tables 2,500 Beds Revenues $250 000 $500 000 Direct materials and direct labour costs 262 500 Depreciation on equipment used exclusively by each product line Marketing and distribution costs $20,000 ( fixed ) + ( $375 per shipment X 40 shipments $30, 000 ( fixed ) + ( $375 per shipment x 100 shipments ) Fixed administration costs of the Division allocated to 110.000 product lines on the basis of revenues Corporate costs allocated to product lines on the basis of revenues Total costs 286000 519.000 Operating profit ( loss ) 8 ( 36 0001 8 ( 19 000 ) Additional information a ) On 1 January 2018 , the equipment for each product line has a carrying amount of $50 , 000 and zero disposal value . Any equipment not used will remain idle Fixed marketing and distribution costs are avoidable if the line is discontinued ( ) Fixed administration costs of the Division and corporate costs are unavoidable d ) Each shipment includes 50 tables or 25 beds Required On the basis of financial considerations alone , should Tasmanian discontinue table 's product line for the year assuming the released facilities remain idle ? What would be the financial effect of dropping this product line ? Show your workings ( 8 Marks ) 2 . Tasmanian received a one - time order from overseas for 1 ,000 beds at $120 per bed Tasmanian has to pay transport costs for $12 500 but no additional marketing and distribution costs for this order a . If Tasmanian has enough excess capacity for this order , should the Tasmanian Division accept this one - time order ? What would be the financial effect of ( 4 Marks ) accepting the one- time order ? Show your workings If Tasmanian is working at full capacity . What would be the minimum price to accept the one -time order and decrease sales by 1 000 beds to regular (3 Marks ) customers ? Show your workings