Fixed Selling and Administrative Expenses Essay Assignment
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Fixed Selling and Administrative Expenses Essay Assignment
- Susie Ques Inc., a company that produces and sells a single product, has provided its contribution format income statement for October:
Sales (6,200 units) $136,400 Variable expenses $80,600 Contribution margin $55,800 Field expenses $48,700 Net operating income $7,100 If the company sells 5,800 units, its total contribution margin should be how much money?
There is not a word length requirement for this question; however, you must show your work.
- The records of the Dodge Corporation show the following results for the most recent year:
Sales (16,000 units) $256,000 Variable expenses $160,000 Net operating income $32,000 Given the provided date, identify the contribution margin.
There is not a word length requirement for this question; however, you must show your work.
- Briquette Corporation has in stock 35,800 kilograms of material L that it bought five years ago for $5.55 per kilogram.
This raw material was purchased to use in a product line that has been discontinued. Material L can be sold as is for scrap for $1.67 per kilogram.
An alternative would be to use material L in one of the company’s current products, Q08C, which currently requires 2 kilograms of a raw material that is available for $9.15 per kilogram.
Material L can be modified at a cost of $0.78 per kilogram so that it can be used as a substitute for this material in the production of product Q08C.
However, after modification, 4 kilograms of material L is required for every unit of product Q08C that is produced. Briquette Corporation has now received a request from a company that could use material L in its production process.
Assuming that Briquette Corporation could use all of its stock of material L to make product Q08C or the company could sell all of its stock of the material at the current scrap price of $1.67 per kilogram, what is the minimum acceptable selling price of material L to the company that could use material L in its own production process?
There is not a word length requirement for this question; however, you must show your work.
Little Cory Corporation is considering dropping product G41O. Data from the company’s accounting system appear below:
Sales $450,000 Variable expenses $185,000 Fixed manufacturing expenses $149,000 Fixed selling and administrative expenses $113,000 All fixed expenses of the company are fully allocated to products in the company’s accounting system.
Further investigation has revealed that $117,000 of the fixed manufacturing expenses and $46,000 of the fixed selling and administrative expenses are avoidable if product G41O is discontinued.
Required: a. According to the company’s accounting system, what is the net operating income earned by product G41O? b. What would be the effect on the company’s overall net operating income of dropping product G41O? Should the product be dropped?
There is not a word length requirement for this question; however, you must show your work.
Direct materials $342 Direct labor $80 Variable manufacturing overhead $48 Fixed manufacturing overhead $520 Total manufacturing cost per unit $990
- Hanson, Inc. makes 1,000 units per year of a part called a prositron for use in one of its products. Data concerning the unit production costs of prositron follow:
An outside supplier has offered to sell Hanson, Inc. all of the prositrons it requires. If Hanson, Inc. decided to discontinue making the prositrons, 10% of the above fixed manufacturing overhead costs could be avoided.
Required:
Assume Hanson, Inc. has no alternative use for the facilities presently devoted to production of the prositrons. If the outside supplier offers to sell the prositrons for $850 each, should Hanson, Inc. accept the offer?
Fully support your answer with appropriate calculations. b. Assume that Hanson, Inc. could use the facilities presently devoted to production of the prositrons to expand production of another product that would yield an additional contribution margin of $50,000 annually.
What is the maximum price Hanson, Inc. should be willing to pay the outside supplier for prositrons?
There is not a word length requirement for this question; however, you must show your work.
- Binford Corporation’s contribution margin ratio is 58%, and its fixed monthly expenses are $94,000. Assume that the company’s sales for May are expected to be $178,000. Required: Estimate the company’s net operating income for May, assuming that the fixed monthly expenses do not change.
There is not a word length requirement for this question; however, you must show your work.
RUBRIC
Excellent Quality
95-100%
Introduction 45-41 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Literature Support
91-84 points
The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.
Methodology
58-53 points
Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met.
Average Score
50-85%
40-38 points
More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided.
83-76 points
Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration.
52-49 points
Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met.
Poor Quality
0-45%
37-1 points
The background and/or significance are missing. No search history information is provided.
75-1 points
Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration.
48-1 points
There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met
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