The summarized income and expense statement for the Dish N' Dat Company product line for the...
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The summarized income and expense statement for the Dish N' Dat Company product line for the month of March is as follows: Sales Dish N' Dut Company Product-Line Income Statement For the Month Ended March 31 Cost of goods Sold Gross Profit Bowls Plates Cups $71,000 $105,700 $31.300 32.600 42.300 16,800 $38,400 $ 63,400 $14,500 Selling and administrative expenses 27400 42.800 16.700 Income from operations $11.000 $ 20,600 S (2.200) Fixed costs are 15% of the cost of goods sold and 40% of the administrative and sales expenses (selling and administrative expenses). Dish N' Dat assumes that fixed costs would not be significantly affected if the cups line is discontinued. A. Prepare the differential analysis report as of March 31 for determine if cup production should continue (Alternative 1) or if production of the cups should be discontinued (Alternative 2). B. Should cup production be continued or discontinued? explain. Make or Buy (produce it or buy it) Diamond Computer Company has been purchasing carrying cases for its laptop computers at a purchase price of $70 per unit. The company, which currently operates below its productive capacity, applies indirect costs. of production (factory overhead) at a rate of 40% of the cost of direct labor (at a rate of 40% of direct labor cost). The unit costs to produce the transport cases (carrying cases) for computers are the following: Direct Materials Direct labor Factory overhead (40% of direct labor) Total cost per unit $45 20 $73 The summarized income and expense statement for the Dish N' Dat Company product line for the month of March is as follows: Sales Dish N' Dut Company Product-Line Income Statement For the Month Ended March 31 Cost of goods Sold Gross Profit Bowls Plates Cups $71,000 $105,700 $31.300 32.600 42.300 16,800 $38,400 $ 63,400 $14,500 Selling and administrative expenses 27400 42.800 16.700 Income from operations $11.000 $ 20,600 S (2.200) Fixed costs are 15% of the cost of goods sold and 40% of the administrative and sales expenses (selling and administrative expenses). Dish N' Dat assumes that fixed costs would not be significantly affected if the cups line is discontinued. A. Prepare the differential analysis report as of March 31 for determine if cup production should continue (Alternative 1) or if production of the cups should be discontinued (Alternative 2). B. Should cup production be continued or discontinued? explain. Make or Buy (produce it or buy it) Diamond Computer Company has been purchasing carrying cases for its laptop computers at a purchase price of $70 per unit. The company, which currently operates below its productive capacity, applies indirect costs. of production (factory overhead) at a rate of 40% of the cost of direct labor (at a rate of 40% of direct labor cost). The unit costs to produce the transport cases (carrying cases) for computers are the following: Direct Materials Direct labor Factory overhead (40% of direct labor) Total cost per unit $45 20 $73
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A Differential Analysis Report for Dish N Dat Company Alternative 1 Continue Cup Production Sales 31... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-1285866307
13th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
Posted Date:
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