A Copier Company, Home Improvement, Luckys Long, Hancock Hoodies, Calibri Company

A Copier Company, Home Improvement, Luckys Long, Hancock Hoodies, Calibri Company

1. A copier company has been using the same Copier A for 5 years. This copier can copy approximately 50 sheets a minute. The company has an opportunity to purchase a new Copier B that can process approximately 60 sheets a minute. The old machine will continue to be used for jobs that arent rush jobs. The new machine will create a need for additional fixed selling expenses, an additional supervisor, and the two employees to use the machine. No other fixed costs will change.Please list out whether each of these costs are relevant ( R) or not relevant ( NR). Format your answer as follows: a) R, b) R, and so forth.a. Copier revenueb. Book value-Copier Ac. Disposal value-Copier Ad. Variable selling expensese. Fixed selling expensesf. Depreciation of Copier Ag. General and administrative overhead fixedh. Direct labori. Indirect laborj. Market value of Copier B2. Home Improvement Company, a retail home store, has two major divisions-outdoors and indoors. Here is the data on their income and expenses:Total Indoor OutdoorSales $85,000 $50,000 $35,000Variable expenses 35,000 15,000 20,000Contribution margin 50,000 35,000 15,000Fixed expenses:Advertising 5,000 2,000 3,000Supervisor salaries 19,000 10,000 9,000Store insurance 2,000 1,000 1,000General administrative 11,000 8,000 3,000overheadTotal fixed expenses 37,000 21,000 16,000Net operating income (loss) $13,000 $14,000 (1,000)Due to the loss, the general manager is considering closing the outdoor division and just focusing on the indoor division. If the division were closed, the supervisor salary and the advertising costs could be eliminated. Should the division be closed? Please show your computations to support your answer.3. Luckys Long board Park manufactures its own long boards to use at their national long board skiing park. An outside supplier has offered to sell long boards to Luckys for $100 per unit. To evaluate this offer, Luckys has gathered the following information relating to its own cost of producing a long board internally:Per Unit Total for 1,000 unitsDirect materials $70 $70,000Direct labor $22 $22,000Variable manufacturing overhead $5 $5,000Supervisors salaries $10 $10,000Depreciation of machinery to make $8 $8,000long boardsFixed manufacturing overhead, $20 $20,000common, allocatedTotal cost $135 $135,000Should the outside suppliers offer be accepted? Show all computations.4. Hancock Hoodies is considering a special order for 100 Hoodies for a local company party. The normal selling price of a hoodie is $30 and its unit product cost is $16 as shown below:Direct materials $6Direct labor $3Manufacturing overhead $7Unit Product cost $16Most of the manufacturing overhead is fixed and unaffected by variations in how many hoodies are produced in a given period. However, $2 of the overhead is variable with respect to the number of hoodies produced. The customer who is interested in the special hoodies order would like a special silkscreen put onto the hoodies. This silkscreen would require additional materials costing $4 per hoodie and would require ordering of the design costing $100 that would have no other use once the special order is completed. This order would have no effect on the companys regular sales, and the order could be fulfilled using the companys existing capacity without affecting any other order.What effect would accepting this order have on the companys net operating income if a special price of $17 is offered per hoodie for this order? Should the company accept the order? Show computations.5. Calibri Company produces three products: F, G, and H. The selling price, variable costs, and contribution margin for one unit of each product follow:ProductF G HSelling price $40 $110 $50Variable costs:Direct materials $16 $25 $20Direct labor $11 $20 $12Variable manufacturing $10 $10 $8overheadTotal variable costs $37 $55 $40Contribution margin $3 $55 $10Contribution margin ratio 7.5% 50% 20%One of two major machines used to produce these products has broken down and a new one is on backorder, so the company is down to one machine. Product F takes 0.20 machine hours to produce one unit, Product G takes 11 machine hours to produce one unit, and Product H takes 2.5 machine hours. There are 1,000 machine hours available on the new machine.a. What is the amount of contribution margin that will be obtained per machine hour on each product?b. Which product would you recommend that the company work on next week the orders for product F, product G or product H? Show your computations.


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