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Wexpro, Incorporated, produces several products from processing 1 ton of clypton, a rare mineral. Material and processing costs total $63,000 per ton, one-fourth of which is allocated to product X15. Six thousand eight hundred units of product X15 are produced from each ton of clypton. The units can either be sold at the spilt-off point for $16 each, or processed further at a total cost of $6.100 and then sold for \$2leach. Required: 1. What is the financial advantage (disadvantage) of further processing product X15 ? 2 Should product X15 be processed further or sold at the split-off point? The Regal Cycle Company manufactures three types of bicycles-a dirt bike, a mountain bike, and a racing bike. Data on sales and expenses for the past quarter follow: Anocated on the basis of sales dollars. Management is concemed about the continued losses shown by the racing bikes and wants a recommendation as to whether or not the line should be discontinued. The special equipment used to produce racing bikes has no resale value and does not wear out. Required: 1. What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bikes? 2. Should the production and sale of racing bikes be discontinued? 3. Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-run profitability of the various product lines. Complete this question by entering your answers in the tabs below. What is the financial advantage (disadvantage) per quarter of discontinuing the Pacing Eikes? anagement is concerned about the continued losses shown by the racing bikes and wants a reconmendabon as to whether or not e tine should be discontinued. The special equipment used to produce racing bikes has no fesale value and does not wear out. equired: What is the financial advantage (disadvantage) per quarter of discontinuing the Racing Bukes? Shothd the production and sale of racing bikes be discontinued? Prepare a properly formatted segmented income statement that would be more useful to manogement in assessing the long-run tofitabilify of the vanous product lines: Complete this question by entering vour answers in the tobs telow. Prepare a properly formatted segmented ioconse statement that would hen more useful to management in assesing the long ran Drofitability of the varlous produxt lines. Troy Engines, Limited, manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Limited, for a cost of $30 per unit, To evaluate this offer, Troy Engines, Limited, has gathered the following information relat to its own cost of producing the carburetor internally: Required: 1. Assuming the company has no alternative use for the faclities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 13,000 carburetors from the outside supplier? 2. Should the outside supplier's offer be accepted? 3. Suppose that if the carburetors were purchased, Troy Engines. Limited, could use the freed capacity to launch a new product The segment margin of the new product would be $130,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 13,000 carburetors from the outside supplier? 4. Given the new assumption in requirement 3 , should the outside supplier's offer be accepted? Complete this question by entering your answers the the tabs below. Assuming the company has no alternative use for the facilities that are now being used to produce the carburetors, what would be the finandal advantage (disadvantage) of buying 13,000 carburetors from the outside supplien? Troy Engines, Limited, manufactures a variety of engines for use in heavy equipment. The company has always produced oll of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engires, Limited, for a cost of $30 per unit. To evaluate this offer. Troy Engines, Limned, has gathered the following information relating to its owi cost of producing the carburetor internally? 4). Required: 1. Assuming the compary has no alternative use for the facilies that are now being used to procuce the carburetors, what would be the francial odvantage (disadvantage) of busing 13,000 carburetors from the outside supplier? 2 should the outside supplier's offer be accepted? 3. Suppose that if the carburetors were purchased, Troy Enghes, Limited. could ise the freed capacity to launch a new product. The segment matgin of the new product would be $130000 per year. Given this new assumption, what would be the financial advantagie (alisodvantage) of biying 13,000 carburetors from the outside supplier? 4. Given the new assumption in requicement 3 , thould the outside shppler s offer be occepted? Complete this question by entering your answers in the tabs betow. sdvantage (disadvantage) of buying 19,000 cartureters froin the outside suppliee? Exercise 11-4 (Algo) Special Order Decision [LO11-4] Imperial Jewelers manufactures and sells a gold bracelet for $405.00. The company's accounting system says that the unit product cost for this bracelet is $275.00 as shown below: The members of a wedding party have approached imperial Jewelers about buying 24 of these gold bracelets for the discounted price of $36500 each. The members of the wedding party would like special filigree applied to the bracelets that would increase the direct materials cost per bracelet by $13. Imperial Jewelers would also have to buy a special tool for $455 to apply the filigree to the bracelets. The special tool would have no other use once the special order is completed. To analyze this special order opportunity, Imperial Jewelers has determined that most of its manufactuing overhead is foxed and unaffected by vatiations in how much jewelry is produced in any given period. However, $14.00 of the overhead is variable with respect to the number of bracelets produced. The company also believes that accepting this order would have no effect on its abirity to produce and sell jeweliy to other customers. Furthermore, the company could fulfill the wedding party's order using its existing manufacturing capocity Required: Required: What is the financial advantage (disadvantage) of accepting the special order from the wedding party? 1. 2. Should the company accept the special order? Complete this question by entering your answers in the tabs below. What is the financial advantage (disadvantage) of accepting the special order from the wedding party? Exercise 11.6 (Algo) Managing o Constrained Resource [LO11.6] concerning three of Portsmountrs prodticts appears below. Required: Casuming thit this extra trme would be used to produce sofas, up to how much of an overtime tahe per hour should the conouny be Wing to pay to keep the uphostery shap open atter normal working hours? Comphete this quetion brentering your answers in then Labs betom: Exercise 11-6 (Algo) Managing a Constrained Resource [LO11-6] Pontsmouth Company makes upholstered fumiture. Its only variable cost is direct materials. The demand for the companys products far exceeds its manufacturing capacity. The bottietreck (or constraint) in the production process is upholstery faborthours: Information concerning three of Portsmouth's products appears below Required: 1. Portsmouth is considerang paying its upholstery taborers hourly cormpensation, in addition to their usual salaries, to work overtime. Assuming that this extra time would be used to produce sofas, up to how much of an overtine rate per fiour should the company be willing to pay to keep the upholstery shop open after normal working hours? 2. A small nearby upholstering company has offered to upholster fumeure for Portsmouth at a price of $51 per hour. The management of Portimouth is confident tirat this upholstering company's work is high qually and the if craftsmen can work as quickly as Portsmouth's own cratsmen on the simpler upholstering jobs such as the Love Seat How much additional contribution maroin per hour can Portsmouth eam if it hires the nearby uphoistering company to make Love Seats? 3. Should Portsmouth hire the nearby upholstering company? Complete this question by enterina your answers in the tabs below. A small neasty upholsteting company has offered to upholser fumiture for Portancuth at a price of s51 per houf. Tie

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