Mba 503 Assignment Essay Sample

Problem5-18A Pricing determinations made with ABC system cost informations Morello Sporting Goods Corporation makes two types of rackets. tennis and badminton. The company uses the same installation to do both merchandises even though the procedures are quiet different. The company has late converted its cost accounting system to activity-based costing. The following are the cost informations that June Searight. the cost. comptroller. prepared for the 3rd one-fourth of 2011 ( during which Morello made 70. 000 tennis rackets and 30. 000 badminton rackets ) .

Direct CostTennis Racquet ( TR ) Badminton Racquet ( BR ) Direct stuffs $ 18 per unit $ 14 per unit
Direct Labor 32 per unit 26 per unit

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CategoryEstimated CostCost DriverAmount of Cost Driver
Unit level $ 750. 000Number of review hoursTR: 15. 000 hours BR:10. 000 hours Batch degree 250. 000Number of setupsTR:80 apparatuss ; BR:45 setups Product degree 150. 000Number of Television Commercials TR: 4 ; BR: 1 Facility degree 650. 000Number of machine hoursTR: 30. 000 hours ; BR: 35. 000 hours

Inspectors are paid harmonizing to the figure of existent hours worked. which is determined by the figure of rackets inspected. Engineers who set up equipment for both merchandises are paid monthly wages Television commercials fees are paid at the beginning of the one-fourth. Facility-level cost includes depreciation of all production equipment.

a. Compute the cost per unit for each merchandise.
B. If direction wants to monetary value badminton racquets 30 per centum above cost. what monetary value should the company set? c. The market monetary value of tennis rackets has declined well because of new rivals come ining the market. Management asks you to find the minimal cost of bring forthing tennis rackets in the short term. Supply that information.

Problem 6-30A Comprehensive job including particular order. outsourcing. and section riddance determinations Huffman corporation makes and sells state-of-the-art electronics merchandises. One of its sections produces The Math Machine. an cheap reckoner. The conpany’s head comptroller late prepared the undermentioned income statement demoing one-year grosss and disbursals associated with the segment’s operating activities. The relevant scope for the production and sale of reckoners is between 30. 000 and 60. 000 units per twelvemonth.

Gross ( 40. 000 units X $ 8 ) $ 320. 000
Unit-level variable cost
Materials cost ( 40. 000 Ten $ 2 ) ( 80. 000 )
Labor cost ( 40. 000 Ten $ 1 ) ( 40. 000 )
Manufacturing operating expense ( $ 40. 000 Ten $ 0. 50 ) ( 20. 000 )
Transporting and managing ( 40. 000 Ten $ 0. 25 ) ( 10. 000 )
Gross saless committees ( 40. 000 Ten $ 1 ) ( 40. 000 )
Contribution border 130. 000
Fixed disbursals
Ad costs ( 20. 000 )
Salary ofproduction supervisor ( 60. 000 )
Allocated companywide facility-level disbursals ( 80. 000 ) Net Loss $ ( 30. 000 )

Required ( Consider each of the demands independently. )
a. A big price reduction shop has approached the proprietor of Huffman about purchasing 5. 000 reckoners. It would replace “The Machines’s lable with its ain logo to avoid impacting Huffman’s bing clients. Because the offer was made straight to the proprietor. no gross revenues committees on the dealing would be involved. but the price reduction shop is willing to pay merely $ 4. 50 per reckoner. Based on quantitative factors entirely. should Huffman accept the particular order? Support your reply with appropriate calculations. Specifically. by what sum would the particular order addition or diminish profitableness? b. Huffman has an chance to purchase the 40. 000 reckoners it presently makes from dependable viing maker for $ 4. 90each. The merchandise meets Huffman’s quality criterions. Huffman could go on to utilize its ain logo. advertisement plan. and gross revenues force to administer the merchandises.

Should Huffman purchase the reckoners or continue to do them? Support your reply with appropriate calculations. Specifically. how much more or less would it be to purchase the reckoners than do them? Would your reply alteration if the volume of gross revenues were increased to 60. 000 units? c. Because the reckoner division is presently runing at a loss. should it be eliminated from the company’s operations? Support your reply with appropriate calculations. Specifically. by what sum would the segment’s riddance addition or diminish profitableness?