Financial Accounting assignment solution
ACC 2242 Assign#4.. Due Date …..Wednesday…Aug 07, 2013
8-35B
8-40B
Fibre Systems
Best Use of Facilities Analysis
Make
Buy and Use Facilities for Other Product
Variable unit cost of
obtaining the optical switches $ 13 $ 11
Number of optical switches × 80,000 × 80,000
Total variable cost of obtaining
80,000 optical switches
$1,040,000
$880,000
Expected profit contribution from
the other product — (130,000)
Expected net cost of obtaining
80,000 optical switches
$1,040,000
$ 750,000
Decision: Outsource the switches and use the facilities to manufacture the other product. This alternative has a $290,000 advantage over the next best alternative
8-42B
The $810 spent processing milk into yogurt is irrelevant since it will be incurred no matter which way Organicplus decides to sell its yogurt. Organicplus needs to analyze the additional costs and benefits (sales revenue) associated with the two possible sales strategies:
Sell as 4-L containers
Sell as individual portions
Sales revenue per unit
$ 8.00
$ 0.50
Additional processing costs per unit- packaging
(0.12)
(0.05)
Additional processing costs per unit- adding fruit
(0.00)
(0.10)
Net benefit per unit $ 7.88 $ 0.35
Number of units produced per batch × 550 × 11,579
Net benefit per batch $4,334 $ 4,052.65
Based on this analysis, selling fruited yogurt as individual portions is less profitable than selling plain yogurt in bulk 4-L containers. Organicplus would be better off making and selling the 4-L tubes of plain yougrt.
8-46A
Req. 1
Security
Analysis of Dropping the Industrial System Product Line
Expected decrease in revenues
$300,000
Expected decrease in expenses:
Variable expenses
$104,000
Fixed cost of goods sold 80,000
Fixed marketing and administrative expense
12,000
Expected decrease in total expenses
8-35B
8-40B
Fibre Systems
Best Use of Facilities Analysis
Make
Buy and Use Facilities for Other Product
Variable unit cost of
obtaining the optical switches $ 13 $ 11
Number of optical switches × 80,000 × 80,000
Total variable cost of obtaining
80,000 optical switches
$1,040,000
$880,000
Expected profit contribution from
the other product — (130,000)
Expected net cost of obtaining
80,000 optical switches
$1,040,000
$ 750,000
Decision: Outsource the switches and use the facilities to manufacture the other product. This alternative has a $290,000 advantage over the next best alternative
8-42B
The $810 spent processing milk into yogurt is irrelevant since it will be incurred no matter which way Organicplus decides to sell its yogurt. Organicplus needs to analyze the additional costs and benefits (sales revenue) associated with the two possible sales strategies:
Sell as 4-L containers
Sell as individual portions
Sales revenue per unit
$ 8.00
$ 0.50
Additional processing costs per unit- packaging
(0.12)
(0.05)
Additional processing costs per unit- adding fruit
(0.00)
(0.10)
Net benefit per unit $ 7.88 $ 0.35
Number of units produced per batch × 550 × 11,579
Net benefit per batch $4,334 $ 4,052.65
Based on this analysis, selling fruited yogurt as individual portions is less profitable than selling plain yogurt in bulk 4-L containers. Organicplus would be better off making and selling the 4-L tubes of plain yougrt.
8-46A
Req. 1
Security
Analysis of Dropping the Industrial System Product Line
Expected decrease in revenues
$300,000
Expected decrease in expenses:
Variable expenses
$104,000
Fixed cost of goods sold 80,000
Fixed marketing and administrative expense
12,000
Expected decrease in total expenses