Kathy G.

Algebra and Trigonometry

1 year, 4 months ago

Question 4: Macaroon Corporation produces product XXX and has provided the data from its activity-based costing system for assembly, processing orders and inspection of its product. They have estimated a total cost of at a total of 23,050 machine hours, it costed the company a total of $383,150 for the assembly of product ABC. The company produced a total of 1,550 orders at a total of $50,888 and 1,620 hours of inspection at a total of $103,250. In the year 2019, the company produced and sold a total of 225 unit at a selling price per unit of $124.60. The annual machine hour or production was a total of 300 and inspection hours 11. The annual orders came out to be a total of 75 orders where the direct material cost per unit is $22.08 and Direct labor cost per unit $45.77. Activity Pool CostTotal CostTotal ActivityAssembly383,15023,050Processing Order50,8881,550Inspection103,2501,620 Selling Price Per Unit124.6Direct Material Cost per unit22.08Direct Labor Cost Per unit45.77Annual Units Production & Sales225Annual Machine Hours300Annual Orders75Annual Inspection Hours11 A. Determine the suitable production margin for product ABC based on total assembly (2 marks), processing orders (2 marks) and inspection cost pool (2 marks)B. Compute the appropriate activity cost rate for product . (3 Marks)C. Compute the average cost of product ABC. (3 Marks) Question 5: Iron Manufactures decorative iron railings makes several assumptions when it comes to preparing for next year’s operations. The management has developed a number of estimates which include sales price, fixed cost, and variable cost per unit. Running theit analysis involves using severation equations to figure out the best sales voloum option for them. The assumptions the company made are: TotalPer UnitSales (20,000 units)$ 1,000,000$ 50Direct Materials$ 200,000$ 10Direct Labor (variable)$ 50,000$ 2.50Manufacturing Overhead: Variable$ 70,000$ 3.50Fixed$ 80,000$ 4Selling & Administrative: Variable$ 100,000$ 5Fixed$ 30,000$ 1.50For the business to be profitable, the contribution margine must exceed total fixed costs. Determine whetere the contribution margin of the company exceeds its total fixt cost (2 Marks). If yes, determine what is the appropriate break-even point (in both dollars and units) for the company. (2 Marks)Evaluate what will the revenue earned by the company be after they pay all their fixed and variable costs associated with the production (2 Marks). If the company is targeting a net operating income of $660,500, what will the best degree of net operating leverage be? (2 Marks).