Please assist, my answers are off. Please do step by step so that I can follow how you came to the answer.
Please assist, my answers are off. Please do step by step so that I can follow how you came to the answer.
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Question 1Motorcade Company has three service departments (S1, S2, and S3) and two productiondepartments (P1 and P2). The following data relate to Motorcade’s allocation of servicedepartment costs:Budgeted CostsNbr ofEmployeesS1$3,160,00075S2$2,680,00050S3$1,000,00025P1150P2225Service department costs are allocated by the direct method. The number of employees is usedas the allocation base for all service department costs.Calculate the total service department cost allocated to production department P1.Question 2InFnity Designs, an interior design company, has experienced a drop in business due to anincrease in interest rates and a corresponding slowdown in remodeling projects. To stimulatebusiness, the company is considering exhibiting at the Home and Garden Expo. The exhibit willcost the company $12,000 for space. At the show, InFnity Designs will present a slide show on aPC, pass out brochures that are printed previously, (the companyprinted more than needed), and show its portfolio of previous jobs.The company estimates that revenue will increase by $36,000 over the next year as a result ofthe exhibit. ±or the previous year, proFt was as follows:Revenue $201,000Less:Design supplies (variable cost) $17,000Salary of Samantha Spade (owner) 80,000Salary of Kim Bridesdale (full time employee) 55,000Rent $18,000Utilities $6,000Depreciation of o²ce equipment 3,600Printing of advertising materials 700Advertising in Middleton Journal 2,500Travel expenses other than depreciation of autos (variable cost)$2,000Depreciation of company cars9,000Required:Calculate the impact of the exhibit on company proFt.Question 3Each year, Sunshine Motos surveys 7,500 former and prospective customers regardingsatisfaction and brand awareness. ±or the current year, the company is considering outsourcingthe survey to Global Associates, who have o³ered to conduct the survey and summarize resultsfor $30,900.Craig Sunshine, the president of Sunshine Motors, believes that Global will do ahigher-quality job than his company has been doing, but is unwilling to spend more than $10,000above the current costs.The head of bookkeeping for Sunshine has prepared the followingsummary of costs related to the survey in the prior year.
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Mailing $17,000Printing (done by Lester Print Shop) $4,500Salary of Pat Fisher, part-time employee who stu±ed envelopes and summarized data whensurveys were returned (100 hours X $15) $1,500Share of depreciation of computer and software used to track survey responses and summarizedresults. $1,100Share of electricity/phone/etc. based on square feet of space occupied by Pat Fisher vs. entirecompany $500REQUIRED: What is the incremental cost of going outside versus conducting the survey as in thepast?Question 4Howell Corporation produces an executive jet for which it currently manufactures a fuel valve; thecost of the valve isindicated below:Cost per UnitVariable costsDirect material$940Direct labor600Variable overhead300Fixed costsDepreciation of equipment500Depreciation of building275Supervisory salaries300The company has an o±er from Duvall Valves to produce the part for $2,000 per unit and supply1,000 valves (the numberneeded in the coming year). If the company accepts this o±er and shutsdown production of valves, production workers and supervisors will be reassigned to other areas.The equipment cannot be used elsewhere in the company, and it has no market value. However,the space occupied by the production of the valve can be used by another production group thatis currently leasing space for $55,000 per year.What is the incremental savings of buying the valves? (The answer should be stated in a per-unitformat and is a positive number)Question 5Landmark Coal operates a mine. During July, the company obtained 500 tons of ore, whichyielded 250 pounds of gold and 63,700 pounds of copper. The joint cost related to the operationwas $500,000. Gold sells for $325 per ounce and copper sells for $0.87 per pound. Allocate thejoint costs using relative weight. With these costs, what is the pro²t or loss associated withCopper?Question 6Landmark Coal operates a mine. During July, the company obtained 500 tons of ore, whichyielded 250 pounds of gold and 62,800 pounds of copper. The joint cost related to the operationwas $500,000. Gold sells for $325 per ounce and copper sells for $0.89 per pound. Allocate thejoint costs using the relative sales values. With these costs, what is the pro²t or loss associatedwith Copper?
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