Reference no: EM132580703

Answer all the questions.

Question 1) Northenscold Company sells several products. Information of average revenue and costs are as follows:

a) Calculate the contribution margin per unit.
b) Calculate the number of units Northenscold's must sell each year to break even.
c) Calculate the number of units Northenscold's must sell to yield a profit of $144,000.

Question 2) Write a short note on any two:
a) Break Even Point Analysis
b) Fixed and Variable Costs

Question 3) Dakota Company has been producing and selling 42,000 hats a year. The company has the capacity to produce 52,000 hats. The following data is available:
Selling Price per unit $30 Variable manufacturing costs per unit $13
Variable selling and administrative costs per unit $7
Total fixed manufacturing costs $128,000 Total fixed selling and administrative costs $56,000
What is the net income being made in current situation? If a special order is accepted for 10,000 hats at a price of $25 per unit, how much would the change in net income be?

Question 4) Asha Company completed its inventory count. It arrived at a total inventory value of $200,000. You have been given the information listed below. Discuss how this information affects the reported cost of inventory.
i. Asha included in the inventory goods held on consignment for Falls Co., costing $35,000.
ii. The company did not include in the count purchased goods of $20,000, which were in transit (terms: FOB shipping point).
iii. The company did not include in the count inventory that had been sold with a cost of $18,000, which was in transit (terms: FOB shipping point).

Question 5) Answer the following:
a) Tracy Company sells three different types of home heating stoves (gas, wood, and pellet). The cost and net realizable value of its inventory of stoves are as follows.

Determine the value of the company's inventory under the lower-of-cost-or-net realizable value approach.

b) Calculate the depreciation using MACRS approach for an asset which costs $85,000 and is being depreciated using a 5-year normal recovery period (depreciation rate is as follows: 20%, 32%, 19%, 12%, 12% and 5%). Will the depreciation amount be difference in case of straight line method when the scrap value of the asset is $5,000?

Question 6) ANZ Corporation manufactures a product available in two models: ABC, and PQR. Despite the growing popularity of the PQR model, company profits have been declining steadily, and management is beginning to think there might be a problem with their costing system. Material and Labour costs are given below:

Production overheads are $600,000 each month. These are absorbed on a sales demand basis.
Calculate the full production costs for ABC and PQR, using traditional costing method

Question 7) The ABC Company produces most of its own parts and components. The standard wage rate in the parts department is $30 per hour, variable is applied at $ 20 per labour hour and fixed overheads are at a standard rate of $ 25 per hour.

For its current year's output, the company will require a new part. This part can be made in the parts department without any expansion of existing facilities. Nevertheless, it would be necessary to increase the cost of product testing and inspection by $500 per month. Estimated labour time for the new part is half an hour per unit. Raw material cost can be estimated at $60 per unit.

The alternative choice before the company is to produce part from an outside supplier at $90 per unit. The company has estimated that it will need 2000 new parts during the current year.

(a) Advise the company whether it would be more economical to buy or make the new parts.

(b) Would your answer be different if the requirement of new parts was only 1000 parts?

Question 8) Data for Houston Electronics' Astro condensers. Calculate the value for Cost of goods sold and Ending inventory according FIFO, LIFO and Average Cost methods.

HOUSTON ELECTRONICS
Astro Condensers

Harvard referencing style.