Falls Flour Mill Company started many years ago producing a single
product. It has grown to produce many
diverse consumer products ranging from foods to paper goods. Currently, the corporation is barely making a
profit, and the price of its stock has languished. Division managers have traditionally been
incentivized with stock options and awards.
However, management is evaluating a new bonus plan based on segment profits
within each division. Below are 20X4
facts about the Sugar Products Division, which generates 10% of overall
corporate revenue. The Sugar Products
Division has two key products – raw sugar and candy.
Total sales of raw sugar and candy $457,50,000
Traceable, controllable, sugar division fixed costs
Traceable, uncontrollable, sugar division fixed costs
Non-traceable, controllable, sugar division fixed costs 15,00,000
Non-traceable, uncontrollable, sugar division fixed costs
Variable selling, general, & administrative costs 90,50,000
Variable product costs
General corporate expenses for all divisions
Prepare a contribution income statement for the aggregated
Sugar Division (one column). If the
division manager is to be evaluated on controllable contribution margin, would
the Sugar Division manager appear to be entitled to a bonus?
Manufacturing produces snow skis in a two-step production process – cutting and
laminating. The manufacturing center is
supported by two service centers – a health clinic and a janitorial
service. The following table reveals
certain facts about each activity:
Employees 2 4 10 15
footage 1,200 600 12,000 8,000
incurred $1,80,000 $1,25,000 $7,00,000 $8,00,000
(a) Using the
direct method, allocate the service department costs to production. The clinic costs are to be allocated based on
employees, and the janitorial costs are to be allocated based on the square
24.02 Pure Comfort
manufactures and sells mattresses with adjustable air chambers. Pure Comfort has been producing and selling
approximately 500,000 units per year.
Each units sells for $600, and there are no variable selling, general,
or administrative costs. The company has
been approached by a foreign supplier who wishes to provide the air compressor
component for $90 per unit. Total annual
manufacturing costs, including air compressors, is as follows:
factory overhead 160,00,000
factory overhead 350,00,000
If Pure Comfort outsources the air compressor, it is
expected that direct materials will be reduced by 20%, direct labor by 30%, and
variable factory overhead by 25%. There
will be no reduction in fixed factory overhead.
Pure Comfort outsource the air compressor?
outsourcing the air compressor will free up capacity, and enable Pure Comfort
to increase production and sales to 600,000 units per year, would it make sense
Paintball Supply manufactures paintballs used by recreational gamers. The cost of producing a box of 2,500
paintballs is as follows:
factory overhead 18.75
factory overhead 25.00
selling, general, and administrative costs
selling, general, and administrative costs
The fixed factory overhead and fixed SG&A cost is
allocated based on an assumption that the business will produce 400,000 boxes
of paintballs per year. The company has
capacity to produce 500,000 boxes without impacting either category of fixed
(a) The market
for paintballs has become very competitive. Management has requested to know
the break-even price that can be charged for a box of paintballs, assuming
production and sale of 400,000 boxes.
has received a special order request for 100,000 boxes of “private
label” paintballs. The order
specifies a per box price of $75. How
will profitability be impacted if the order is accepted?
24.04 Air Mall
produces a catalog that is placed in airline seatbacks during international
flights. Passengers typically skim the
catalog during flights and can buy selected merchandise from flight attendants,
duty and tax free, while over international waters. Below is a report for a recent period:
Total Beverages Jewelry
Sales $26,00,000 $14,00,000 $5,00,000 $7,00,000
16,35,000 9,80,000 2,00,000 4,55,000
$9,65,000 $4,20,000 $3,00,000 $2,45,000
9,00,000 3,00,000 3,00,000 3,00,000
$65,000 $1,20,000 $- $(55,000)
The fixed expense is the amount paid for printing the
catalog and paying the airline to include the item in seatbacks. Management is evaluating discontinuing the
sale of electronics products. Fixed
costs will not change; however, jewelry sales are expected to increase by 30%.
Determine if overall income will be improved if the sale of
electronics products is ceased.
Our Service Charter
Excellent Quality / 100% Plagiarism-FreeWe employ a number of measures to ensure top quality essays. The papers go through a system of quality control prior to delivery. We run plagiarism checks on each paper to ensure that they will be 100% plagiarism-free. So, only clean copies hit customers’ emails. We also never resell the papers completed by our writers. So, once it is checked using a plagiarism checker, the paper will be unique. Speaking of the academic writing standards, we will stick to the assignment brief given by the customer and assign the perfect writer. By saying “the perfect writer” we mean the one having an academic degree in the customer’s study field and positive feedback from other customers.
Free RevisionsWe keep the quality bar of all papers high. But in case you need some extra brilliance to the paper, here’s what to do. First of all, you can choose a top writer. It means that we will assign an expert with a degree in your subject. And secondly, you can rely on our editing services. Our editors will revise your papers, checking whether or not they comply with high standards of academic writing. In addition, editing entails adjusting content if it’s off the topic, adding more sources, refining the language style, and making sure the referencing style is followed.
Confidentiality / 100% No DisclosureWe make sure that clients’ personal data remains confidential and is not exploited for any purposes beyond those related to our services. We only ask you to provide us with the information that is required to produce the paper according to your writing needs. Please note that the payment info is protected as well. Feel free to refer to the support team for more information about our payment methods. The fact that you used our service is kept secret due to the advanced security standards. So, you can be sure that no one will find out that you got a paper from our writing service.
Money Back GuaranteeIf the writer doesn’t address all the questions on your assignment brief or the delivered paper appears to be off the topic, you can ask for a refund. Or, if it is applicable, you can opt in for free revision within 14-30 days, depending on your paper’s length. The revision or refund request should be sent within 14 days after delivery. The customer gets 100% money-back in case they haven't downloaded the paper. All approved refunds will be returned to the customer’s credit card or Bonus Balance in a form of store credit. Take a note that we will send an extra compensation if the customers goes with a store credit.
24/7 Customer SupportWe have a support team working 24/7 ready to give your issue concerning the order their immediate attention. If you have any questions about the ordering process, communication with the writer, payment options, feel free to join live chat. Be sure to get a fast response. They can also give you the exact price quote, taking into account the timing, desired academic level of the paper, and the number of pages.