View Policies Current Attempt in Progress The costs listed below relate to a variety of different decision situations. For each cost, indicate if it is relevant or not to the related decision. Cost Decision 1. Unavoidable fixed overhead Eliminate an unprofitable segment. 2 Direct labour Make or buy. 3. Original cost of old Replace equipment. equipment 4. Joint production costs Sell or process further. 5. Opportunity cost 6. Segment manager's salary Cost of new equipment 8. Incremental production Accept a special order. Eliminate an unprofitable segment. (The manager will be terminated.) Replace equipment. Sell or process further. urrent Attempt in Progress Nicole Filippas, a recent graduate of Rollings University's accounting program, evaluated the operating performance of Poway Company's six divisions. Nicole made the following presentation to Poway's board of directors and suggested the Erie division be eliminated. "If the Erie division is eliminated" she said, "our total profits would increase by $24,300. The Other Five Divisions Erie Division Total Sales $1,664,500 $100,500 $1,765,000 Cost of goods sold 978,100 76,300 1,054,400 Gross profit 686,400 24,200 710,600 Operating expenses 526,500 48,500 575,000 $159,900 $(24,300) $135,600 Net income In the Erie division, the cost of goods sold is $59.600 variable and $16,700 fixed, and operating expenses are $15,900 variable and $32,600 fixed. None of the Erie division's fixed costs will be eliminated if the division is discontinued. Is Nicole right about eliminating the Erie Division? Prepare a schedule to support your answer. (If an amount reduces the net income then enter with a negative sign preceding the number eg-15,000 or parenthesis, e.g. (15,000)) Net Income Increase Is Nicole right about eliminating the Erie Division? Prepare a schedule to support your answer. (If an amount reduces the net income th enter with a negative sign preceding the number eg.-15,000 or parenthesis, eg. (15,000).) Nicole is eTextbook and Media Save for Eater Continue Eliminate $ Net Income Increase (Decrease) Attempts: 0 of 3 used Submit An Current Attempt in Progress Dalton Company manufactures and sells two products. Relevant per-unit data concerning each product follow. Product Basic Deluxe Selling price $44.00 $53.00 Variable costs $22.00 $23.60 Machine hours 0.50 0.70 Calculate the contribution margin per machine hour for each product. Contribution margin per machine hour $ eTextbook and Media Basic Deluxe 13 Contribution margin per machine hour eTextbook and Media If 1,440 additional machine hours are available, which product should Dalton manufacture? Dalton should manufacture the product. eTextbook and Media Prepare an analysis showing the total contribution margin if 1,440 additional hours are: (1) Divided equally between the products. Prepare an analysis showing the total contribution margin if 1,440 additional hours are: (1) Divided equally between the products, Basic Deluxe Total contribution margin (2) Allocated entirely to the product identified in part (b), Total contribution margin eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer ent Attempt in Progress se Chabot recently opened her own basket-weaving studio. She sells finished baskets in addition to the raw materials needed by stomers to weave baskets of their own. Jose has put together a variety of raw material kits, with each kit including materials at rious stages of completion. Unfortunately, because of space limitations, Jose is unable to carry all the varieties of kits she originally sembled and must choose between two basic packages. he basic introductory kit includes undyed, uncut reeds (with dye included) for weaving one basket. This basic package costs Jose 15 and sells for $30. The second kit, called Stage 2, includes cut reeds that have already been dyed. With this kit, the customer only as to soak the reeds and weave the basket. Jose is able to produce the second kit by using the basic materials included in the first kit nd adding one-half hour of her own time, which she values at $18 per hour. The kit of dyed and cut reeds sells for $33. repare an incremental analysis. (If an amount reduces the net income then enter with a negative sign preceding the number e.g.-15,000 or arenthesis, eg (15,000) Per unit selling price Costs: Materials Labour Sell Basic Kit Process Further Stage 2 Kit Net Income Increase (Decrease) Per unit selling price Costs: Materials Labour Total costs Incremental revenue Basic Kit Stage 2 Kit (Decrease) Determine whether Jose's basket-weaving shop should carry the basic introductory kit with undyed and uncut reeds or the Stage 2 kit with reeds already dyed and cut. Jose's basket-weaving studio carry the Stage 2 kits. eTextbook and Media Save for Later Attempts: 0 of 3 used Submit