SugarCubes distributes hydraulic hoses, owning exclusive distribution rights to a Taiwanese manufacturer They are at the top end of the market and have recently included value added services to customers They have 3 metal frames SC Standard, SC Hop, and SC HD HD is recently new SC Standards is the most important with the most products sold They do sell equipment all activities form the division MasterCubes Now, the next division for services have been rapidly growing with product engineering, product support, and project management Management sees they are aligned as a company but wants to incentivize different products and services to provide a holistic solution to customers They do not have manufacturing operations, as they are made in Japan and given to customers where they can customize at the site with their staff or hire additional contractors to do it The finance department of SugarCubes has provided the following list of product costing possibilities Variable Costs, Cost of Sales and Full Absorption Costs Based on which financial information should a streamlining of the product portfolio of SugarCubes be based Based on which financial information should a variable provision system for the sales personnel be implemented at SugarCubes Based on which financial information should a customer relationship be evaluated at SugarCubes Variable Costs SC Standard SC Hop SC HD Product Engineering Product Support Project Management Cost Object 1 1 1 60 min 60 min 60 min Direct Material 8000 12000 20000 Material overhead Fixed Manufacturing Cost Administrative Overhead Variable Conversion Costs 95 95 60 Sales Overhead Variable Costs Total 8000 12000 20000 95 95 60 Cost of Sales Cost Object 1 1 1 60 min 60 min 60 min Direct material 8000 12000 20000 Material overhead 440 660 1100 Variable conversion cost 95 95 60 Fixed conversion cost 30 30 10 75 Cost of Sales Total 8440 12660 21100 125 125 70 75 Full Absorption Cost Cost object 1 1 1 60 min 60 min 60 min Direct Material 8000 12000 20000 Material Overhead 440 660 1100 Variable Conversion Cost 95 95 60 Fixed manufacturing costs 30 30 10 75 Cost of sales 8440 12660 21100 125 125 70 75 general overhead 11900 17851 29751 176 176 100 net sale prices 11376 17802 32703 238 208 109

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 23, 2024

SugarCubes distributes hydraulic hoses, owning exclusive distribution rights to a Taiwanese manufacturer. They are at the top end of the market and have recently included

SugarCubes distributes hydraulic hoses, owning exclusive distribution rights to a Taiwanese manufacturer. They are at the top end of the market and have recently included value added services to customers. They have 3 metal frames: SC Standard, SC Hop, and SC HD. HD is recently new. SC Standards is the most important with the most products sold. They do sell equipment; all activities form the division MasterCubes.

Now, the next division for services have been rapidly growing with product engineering, product support, and project management. Management sees they are aligned as a company but wants to incentivize different products and services to provide a holistic solution to customers. They do not have manufacturing operations, as they are made in Japan and given to customers where they can customize at the site with their staff or hire additional contractors to do it.

The finance department of SugarCubes has provided the following list of product costing possibilities: Variable Costs, Cost of Sales and Full Absorption Costs.

Based on which financial information should a streamlining of the product portfolio of SugarCubes be based?
Based on which financial information should a variable provision system for the sales personnel be implemented at SugarCubes?
Based on which financial information should a customer relationship be evaluated at SugarCubes?

Variable Costs	SC Standard	SC Hop	SC HD	Product Engineering	Product Support	Project Management
Cost Object	1	1	1	60 min	60 min	60 min
Direct Material	8000	12000	20000
Material overhead
Fixed Manufacturing Cost
Administrative Overhead
Variable Conversion Costs				95	95	60
Sales Overhead
Variable Costs Total	8000	12000	20000	95	95	60

Cost of Sales
Cost Object	1	1	1	60 min	60 min	60 min
Direct material	8000	12000	20000
Material overhead	440	660	1100
Variable conversion cost				95	95	60
Fixed conversion cost				30	30	10.75
Cost of Sales Total	8440	12660	21100	125	125	70.75

Full Absorption Cost
Cost object	1	1	1	60 min	60 min	60 min
Direct Material	8000	12000	20000
Material Overhead	440	660	1100
Variable Conversion Cost				95	95	60
Fixed manufacturing costs				30	30	10.75
Cost of sales	8440	12660	21100	125	125	70.75
general overhead	11900	17851	29751	176	176	100
net sale prices	11376	17802	32703	238	208	109