#1 Felter Company produced and sold 50 000 units of product and is...

#1 Felter Company produced and sold 50 000 units of product and is operating at 70% of plant capacity Unit information aboutits product is as follows Sales price $70 Variable manufacturing cost $45 Fixed manufacturing cost ($500,000 50,000) 10 55 Profit per unit $15 The company received a proposal from foreign company to buy 10,000 units of Felter Company's product for $50 per unit. This is one-time only order and acceptance of this proposal will not affect the company's regular sales. The president of Felter Company is reluctant to accept the proposal because he is concerned that the company will lose money on the specia order Instructions Prepare schedule reflecting an incremental analysis of this proposal and indicate the effect the acceptance of this order might have on the company's income. #2 Henderson Farms reports the following results for the month of November Sales (10,000 units) $600,000 Variable costs 420,000 Contribution margin 180.000 Fixed costs 110,000 Net income $ 70,000 Management is considering the following independen courses of action to increase net income 1. Increase selling price by 5% with no change in total variable costs. 2. Reduce variable costs to 66% of sales 3. Reduce fixed costs by $10,000. Instructions If maximizing net income is the objective, which is the best course of action? #3 Taveras Industries developed the following information for the product sells Sales price $50 per unit Variable cost of goods sold $28 per unit Fixed cost of goods sold $650,000 Variable selling expense 10% sales price Variable administrative expense $2 per unit Fixed selling expense $400, 000 Fixed administrative expense $300,000 For the year ended December 31 2013, Taveras produced and sold 100,000 units of product. Instructions (a) Prepare CVP income statement using the contribution margin format for Taveras Industries for 2013. (b) What was the company's break-even point in units in 2013? Use the contribution margin technique. (c) What was the company's margin of safety in dollars in 2013? #4 Oscar Corporation produces and sells three products Unit dataconcerning each productis shown below. Product z Selling price $200 $300 $250 Direct labor costs 45 75 60 Other variable costs 110 130 106 The company has 2,000 hours of labor available to build inventory in anticipation of the company's peak season Management is trying to decide which product should be produced. The direct labor hourly rate $15. Instructions (a) Determine the number of direct labor hours per unit. (b) Determine the contribution margin per direct labor hour (c) Determine which product should be produced and the total contribution margin for that product. #5 A comparative balance sheet for Rocker Company appears below: ROCKER COMPANY Comparative Balance Sheet Dec .31.2013 Dec 31,2012 Assets Cash $ 33,000 $10,000 Accounts receivable 18,000 14,000 Inventory 25,000 18,000 Prepaid expenses 6,000 9,000 Long-term investments -0- 18,000 Equipment 60,000 32,000 Accumulated depreciation-equipment (20,000) (14,000) Total assets $122,000 $87,000 Liabilities and Stockholders' Equity Accounts payable $ 17,000 7,000 Bonds payable 37,000 47,000 Common stock 40.000 23,000 Retained earnings 28,000 10,000 Total liabilities and stockholders' equity $122,000 $87,000 Additional information Net income for the year ending December 31, 2013 was $33,000 2. Cash dividends of 15,000 were declared and paid during the year 3. Long- term investments that had cost of$18,000 were sold for$14,000 4. Sales for 2013 were $120,000. Instructions Prepare statement of cash flows for the year ended December 31, 2013, using the indirect method Product X Total direct labor hours available 2.000 Contribution margin per direct labor hour Total contribution margin $42,000 #6 Kuhn Bicycle Company has been manufacturing its own seats for its bicycles The company is currently operating at 100% capacity and var riable manufacturing overhead is charged to production at the rate of 60% of direct labor cost. The direct materials and direct labor cost per unit to make the bicycle seats are $8.00 and $9.00, respectively Normal production is 50,000 bicycles per year. A supplier offers to make the bicycle seats at price of $21 each If the bicycle company accepts this offer all var liable manufacturing costs will be eliminated. but the $30 000 of fixed manufacturing overhead currently being charged to the bicycle seats will have to be absorbed by other products Instructions (a) Prepare the incremental analysis for the decision to make or buy the bicycle seats. (b) Should Kuhn Bicycle Company buy the seats from the outside supplier? Justify your answer #7 Speedy Bikes could sell its bicycles to retailers either assembled or unassembled. The cost of an unassembled bikeis as follows. Direct materials $150 Direct labor 70 ariable overhead (70% of direct labor) 49 Fixed overhead (30% of direct labor) 21 Manufacturing cost per unit $290 The unassembled bikes are sold to retailers at $450 each Speedy currently has unused productive capacity that is expected to continue indefinitely management has concluded that some of this capacity car be used to assemble the bikes and sell them at $495 each Assembling the bikes will increase direct materials by $5 per bike, and direct labor by $10 per bike. Additional variable overhead will be incurred at the normal rates. but there will be no additional fixed overhead as a result of assembling the bikes Instructions (a) Prepare an incremental analysis for the -process further decision (b) Should Speedy sell or process further? Why or why not?