[jwhittington5]

1. Cochran Corporation has a plant capacity of 100,000 units per month. Unit costs at capacity are:

Direct Materials $4.00
Direct Labor 6.00
Variable Overhead 3.00
Fixed overhead 1.00
Marketing - fixed 7.00
Marketing/distribution - variable 3.60

Current monthly sales are 95,000 units at $30.00 each. Suzie, Inc. has contacted Cochran Corporation about purchasing 2,000 units at $24.00 each. Current sales would not be affected by the one-time-only special order. What is Cochran's change in operating profits if the one-time-only special order is accepted.

a. $14,800 increase
b. $17,200 increase
c. $22,000 increase
d. $33,200 increase

2. Lewis Auto Company manufactures a part for use in its production of automobiles. When 10,000 items are produced, the costs per unit are:

Direct Maters $12
Direct manufacturing labor 60
variable manufacturing overhead 24
Fixed Manufacturing overhead 32
Total 128

Monty Company has offered to sell Lewis Auto Company 10,000 units of the part for $120 per unit. The plant facilities could be used to manufacture another part at a savings of $180,000 if Lewis Auto accepts the supplier's offer. In addition, $20 per unit of fixed manufacturing overhead on the original part would be eliminated.

Required:
a. What is the relevant per unit cost for the original part?
b. Which alternative is best for Lewis Auto Company? By how much?

3. The management accountant for the Chocolate S'more Company has prepared the following income statement for the most current year.

Chocolate Other Candy Fudge Total
Sales $40,000 $25,000 $35,000 $100,000
Cost of Goods Sold 26,000 15,000 19,000 60,000
Contribution Margin 14,000 10,000 16,000 40,000
Delivery and Ordering costs 2,000 3,000 2,000 7,000
Rent (per sq. foot used) 3,000 3,000 2,000 8,000
Allocated corporate costs 5,000 5,000 5,000 15,000
Corporate profit $4,000 $(1,000) $7,000 $10,000

a. do you recommend discontinuing the Other Candy product line? Why or why not?
b. if the Chocolate product line had been discontinuted, corproate profits for the current year would have decreaswed by what amount?

4. Furniture, Inc. sells lamps for $30. The unit variable cost per lamp is $22. Fixed costs total $9,600.

Required:
a. What is the contribution margin per lamp?
b. What is the breakeven point in lamps?
c. How many lamps must be sold to earn a pretax income of $8,000
d. What is the margin of safety, assuming 1,500 lamps are sold?

[morgaine300]

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Wow, lot of stuff there that you seem to expect someone else to do without even showing an effort on your part to do them.

[jwhittington5]

Wow - a lot of scarasm from a person who assumes that I haven't already been working on these for a week and am continuously coming up with different answers. If you can't reply with an idea of where to at least start so I can make sure I'm on the right track, then please don't reply at all.
Thanks :)

[morgaine300]

I said "showing" an effort. I can't see the effort and do not intend to spend that kind of time on 4 problems when I don't even know that the person has actually made any effort. If you have, show what you've done. Did you READ the link I gave? If so, you should understand what the issue is.

There's four problems -- how do you want me to explain "where to start"? You've got an entire chapter here, not to mention what's involved from other prerequisite chapters. There's LOTS of places to start. If I don't know what you've done or what you do or don't understand, what thing am I supposed to be explaining?

Your expectations for one of us knowing exactly what you need are pretty high.