Managerial Accounting
Essay by m-kashi1 • June 19, 2017 • Term Paper • 774 Words (4 Pages) • 1,052 Views
QUESTION NUMBER-1 (21)
Opportunity cost- Susan Ortiz:
The cost of the two attendants, utilities and the fixed cost are the same, however on the football
Weekend we calculate the opportunity cost as:
There are 100 spots for the car * we know the hours its 6 hours * and we know the hourly rate its $6 so it all-to gather comes up to $3600.
In shot Susan has no concern with the Sheraton’s offers & normal football crowd, but she should think about her potential customer dis-satisfaction and her upcoming loss in future if all the facilities relating to her business will not be available on a busy football weekend.
Question number-2 (1.26)
(Wheelworks, Inc. value chain and strategic cost analysis):
a)
Bike Parts production | Total ($) | Per bike ($) |
Revenue if parts were sold in the market | 300000 | 30 |
Operating cost less depreciation | (100000) | (10) |
Value of the production assets at start and end (1025000-975000) | (50000) | (5) |
Cost of capital @12% 12%*1000000 | (120000) | (12) |
Profit from production | 30000 | 3 |
b)
Bike assembly | Total ($) | Per bike ($) |
Revenue if parts were sold in the market | 1500000 | 150 |
Operating cost less depreciation | (1250000) | (125) |
Value of the production assets at start and end (600000-400000) | (200000) | (20) |
Cost of capital @12% 12%*500000 | (60000) | (6) |
Loss from bike Assembly | (10000) | (1) |
c)
Distributor | Total ($) | Per bike ($) |
Revenue | 2500000 | 25 |
CGS | (1750000) | (175) |
Operating cost include depreciation | (330000) | (33) |
Given Cost of capital | (40000) | (44) |
Profit to retailer | 380000 | 38 |
Note:
- Based on 10000 units of bike.
- $1000000= ($1025000+$975000)/2.
$500000= ($600000+400000)/2.
Question number 2.23:
Franklin L.L.P cost flow
As we know that the cost flow equation is
BB + TI = TO + EB
We have to find the ending inventory we have the other values so by putting all the other values in the equation
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