er. The total cost of producing the milk base for the products is $45,000, which has been allocated based on the gallons of milk base used by each product. Results for July follow:
|
Sour Cream
|
Ice Cream
|
Yogurt
|
Butter
|
Total
|
|
Units sold
|
2,000
|
500
|
400
|
2,000
|
4,900
|
|
|
|
|
|
|
|
Revenue
|
$10,000
|
$20,000
|
$10,000
|
$20,000
|
$60,000
|
|
|
|
|
|
|
|
Variable departmental costs
|
6,000
|
13,000
|
4,200
|
4,800
|
28,000
|
|
|
|
|
|
|
|
Fixed costs
|
5,000
|
2,000
|
3,000
|
7,000
|
17,000
|
|
|
|
|
|
|
|
Net income (loss)
|
$(1,000)
|
$5,000
|
$2,800
|
$8,200
|
$15,000
|
|
|
|
|
|
|
How much are total joint costs of the products
2._Hi-Tech Inc. has several outdated computers that cost a total of $17,800 and could be sold as scrap for $4,600. They could be updated for an additional $2,400 and sold. If Hi-Tech updates the computers and sells them, net income will increase by $9,000. At what price were the updated versions sold?
3._An important step in management's decision-making process is to determine and evaluate possible courses of action.
4._ If the manufacturing overhead costs applied to jobs worked on were greater than the actual manufacturing costs incurred during a period, overhead is said to be?
5._ Value-added activities
Increase the perceived worth of a product or service to customers
Involve those activities that are essential to a companys operations
Include engineering design machining and assembly
Or all of these?
6._ Pascal, Inc. is planning to sell 800,000 units for $1.50 per unit. The contribution margin ratio is 20%. If Pascal will break even at this level of sales, what are the fixed costs?
7._ The Lumber Division of Paul Bunyon Homes Inc. produces and sells lumber that can be sold to outside customers or within the company to the Construction Division. The following data have been gathered for the coming period:
|
Lumber Division:
|
|
|
Capacity
|
200,000 board feet
|
|
Price per board foot
|
$2.50
|
|
Variable production cost per bd. ft.
|
$1.25
|
|
Variable selling cost per bd. ft.
|
$0.50
|
|
Construction Division:
|
|
|
Board feet needed
|
60,000
|
|
Outside price paid per bd. ft.
|
$2.00
|
If the Lumber Division sells to the Construction Division, $0.35 per board foot can be saved in shipping costs.
If the Lumber Division has sufficient excess capacity to fulfill the Construction Division's needs, what will be the effect on the company's overall contribution margin?
8._ The Dairy Division of Famous Foods, Inc. produces and sells milk to outside customers. The operation has the capacity to produce 200,000 gallons of milk a year. Last year's operating results were as follows:
|
Sales (160,000) gallons
|
$500,000
|
|
Variable costs
|
312,000
|
|
Contribution margin
|
188,000
|
|
Fixed costs
|
100,000
|
|
Net Income
|
$88,000
|
Assume the Yogurt Division wants to purchase 30,000 gallons of milk from the Dairy Division. The minimum price that will increase the Dairy Division's profit is.