Reference no: EM131358541
MANAGEMENT ACCOUNTING GROUP ASSIGNMENT
Parker Ltd produce quality pens and pencils and it has been producing and selling 10,000 sets per month . It provides the following information because it has been facing increasing competition both in the local market and from imported products:
Manufacturing costs
Direct material $1.00 per unit
Direct labour 1.20 per unit
Variable overhead 0.80 per unit
Fixed overhead $10,000
Marketing costs
Variable $1.50 per unit
Fixed $15,000
Parker has been selling these pen and pencil sets for $7.50 each and has asked you to provide answers to the following.Each part is to be considered independently of the others.
Required :
(a) Assuming that all 10,000 pen and pencil sets produced in a month are sold calculate the monthly profit .
(b) A request has come from an educational institution for Parker to supply an extra 2,000 pens per month at a price of $5.50 per set.The educational institution want their logo inscribed on the pen and pencil set.This would cost an extra $0.60 per set. Should this one offrequest be accepted based on profit alone? Should any other factors be considered before accepting the order? What other factors should be considered ?
(c) Another request has come in the form of a long term government contract which wants you to supply 5,000 pen and pencil sets per month on an ongoing basis for $4 per set and a one off payment of $4,000.Should this offer be accepted?Provide reasons for your decision.
(d)Parker is trying to enter a foreign market. It believes it can sell an extra 10,000 pen and pencil sets in this market .If it produces this extra 10,000 sets it will be producing at maximum capacity.
What is the minimum price it could enter this market in the short term ? What is the minimum price in the long term?
(e) Parker has an offer from an outside supplier which has offered to supply the 10,000 pen and pencil setsat $4.20 per set.Should you accept this offer?There are no alternative uses for the facilities and while the variable manufacturing costs would be saved you would only save $3000 per month on your fixed manufacturing costs and $0.40 per set off the variable marketing costs.Show calculations to support your answer.
(f) Assuming the same situation as in part (e) above with the same savings in costs except that the facilities(building and car park)can be rented out and you receive $5,500 per month from this ,should you accept the offer from the outside supplier now?Show calculations to support your answer.
After competitors implement the new technology
: Industry demand for your product is P=15,000/q. Current industry output (q) is 5000 units. A plant which produces 1000 units per year costs $10,000, has a variable cost per unit of $2, lasts indefinitely, and can be scrapped for $6,000 at any time. W..
|
Personal financial planning professional attempting
: Pretend you are a personal financial planning professional attempting to devise a comprehensive personal financial plan for Jeff and Mary. Jeff and Mary Douglas, a couple in their mid-30s, have two children - Paul age 6 and Marcy age 7. The Douglas' ..
|
How have you been able to overcome them
: In your journey to become a professional nurse, what barriers have you encountered, and how have you been able to overcome them? Please give at least three (3) barriers, or at least three reasons that you have been encouraged to pursue becoming a ..
|
Yen-dollar exchange rate
: Under the gold standard, if the U.S. dollar was fixed at $30/oz of gold and Japan was fixed at ¥75/oz of gold, what would be the Yen/dollar exchange rate?
|
What is the minimum price in the long term
: ACC202- Parker is trying to enter a foreign market. What is the minimum price it could enter this market in the short term? What is the minimum price in the long term?
|
What will occur in the bank net interest income
: If a bank's net interest margin , which was 1.75%, increases 20 percent and its total assets, which stood originally at $450 million, decline 5%, what will occur in the bank's net interest income? Which of the following are tier one capital?
|
Weighted average of the risk rating of the two investment
: A person invest all 50000 in two stocks: stock A has an expected annual return of 1 % and a risk rating of 2 and stock B has an expected annual return of 6% and a risk rating of 7. The risk rating of total investment is the weighted average of the r..
|
Healthcare are very important aspects of our lives
: The environment and healthcare are very important aspects of our lives, and may have ethical implications. However, it is still unclear whether corporations should focus on these as rights or as privileges.
|
Complete the nih protecting human research participants
: Share your reaction to this course. Next, research your workplace organization to find out how research is conducted that involves human participants. For example, is there an IRB or ethics committee? If so, do they review proposals? Next, find ou..
|