What will the impact on the company overall profitability

Assignment Help Managerial Accounting

Reference no: EM132787801

Question 1 - The following three sections are independent from each other

a. Sam. Co is a Manufacturing company. Currently due to a labor strike the company has access to only to 27,000 direct labor hours available for producing three products named A and B and C. The following information is related to these products:

Product A Product B Product C

Maximum demand 5,500 7,500 4,000

Selling price per unit 57 36 25

Variable cost per unit 49.5 30 18

Direct labor hours required per unit 3 2 3.5

Required - How many units of product A, B and C should Sam Co. produce this year?

Question 2 - Arya Inc. uses a joint production process to produce two products (regular and luxury). The Corporation has $200,000 of joint processing costs this year and is considering whether to process its two products beyond the split-off point. Information about the two products follow:

Regular Luxury

Units produced 26,000 17,000

Total variable cost of processing further $78,000 $119,000

Selling price per unit at split off point 20 55

Selling price per unit after further processing 26 62

Required - Should the two products be processed further? Show all your calculations (4 marks)

Question 3 - A Corporation is composed of three divisions. The following information relates to these three Division:

A B C

Sales $7,500,000 $8,000,000 $5,500,000

Variable cost 5,100,000 4,600,000 3,800,000

Contribution margin 2,400,000 3,400,000 1,700,000

Avoidable fixed cost 1,900,000 3,700,000 1,500,000

Operating income $500,000 ($300,000) $200,000

The company is considering closing Division B. If division B is closed, then the sales of division C will increase by 5%, while sales of division A will decrease by 20%.

Required - What will be the impact on the company's overall profitability if Division B is closed?

Reference no: EM132787801

Questions Cloud

What is the most common reason the irs assesses penalties : What is the most common reason the IRS assesses penalties to preparers during an audit? Failure to obtain full documentation of Schedule C income

Describe all of the appropriate specialized personnel : For this Assignment, write a 3- to 5-page paper, excluding the title and reference pages, describing an imaginary crime scene of a mass disaster and planning.

Develop a policy regarding the three strikes laws : Develop a policy regarding the three strikes laws in the State of California. Address the following in your policy: What alternatives would be placed.

What is the correct amount that can be deducted on schedule : A taxpayer is claiming tax preparation expense, What is the correct amount that can be deducted on their Schedule C for the current year?

What will the impact on the company overall profitability : The company is considering closing Division B. What will be the impact on the company's overall profitability if Division B is closed

Describe the reason for the establishment of the visa type : Indicate the reason for the establishment of the visa type; relate your reasoning to the issues facing the immigrant subset population, and the reason(s).

Calculate the net present value : Twelve Inch Toes Corp. will invest $199,000 in a project that will not begin to produce returns until the fourth year. Calculate the net present value

How sensitive is OCF to changes in quantity sold : Consider a four-year project with the following information: initial fixed asset investment = $475,000; How sensitive is OCF to changes in quantity sold

What would happen to total cost : If Hardee would put two drivers in the tractor for the line-haul move, there would be no rest required for drivers during the line-haul move.

User Account

All Pages