The following information was made available concerning the four departments of the Snake-Bite Company. ABCD Sales(in $)100,00025,00050,00075,000
Question:
The following information was made available concerning the four departments of the Snake-Bite Company.
ABCD
Sales(in $)100,00025,00050,00075,000
Variable cost of gods sold70,00015,00030,00050,000
Variable selling expenses10,0002,0006,00012,000
Contribution margin20,0008,00014,00013,000
Fixed costs20,0005,00010,00015,000
Profit03,0004,000(2,000)
The president of the company has decided that one departmentmustbe dropped. Fixed costs have been assigned according to the sales of each department. Regardless of your decision, fixed costs will be reduced by 25%. Which department should be dropped so as to give the greatest benefit to the company?
Select one:
a.C
b.B
c.D
d.A
Question4
A business plans to make 15,000 coats per annum, each taking the 1.5 direct labour hours. If the direct labour rate is $8 per hour and a pay rise of 15% is awarded halfway through the year, what is the total annual direct labour budget?
Select one:
a.$ 120,000
b.$ 207,000
c.$ 180,000
d.$ 193,500