please answer all parts thankyou so much

TOTES Case Study - TETRA Name: RELEVANT COSTS FOR SHORT TERM DECISION-MAKING LAR 5 Tonia and Tara have been considering expanding their operations. They have hired a cost accountant to help them analyze the cost-effectiveness of the following business opportunities and decisions: Special Order. One of TOTES.customers is interested in ordering a unique Christmas tote bag Outsource the cutting department. The company's fabric supplier has offered to deliver the fabric pre-cut, which would eliminate the cutting department Unprofitable segment. TOTES has three sales divisions: On-line, Product Representatives, and the Factory Store. In recent months, the Factory Store has shown an operating loss and management is considering closing the store. In this lab, students will evaluate specific short-term decisions based on the current company data and make recommendations to Tonia and Tara. 30 TOTES. CASE STUDY - TETRA SPECIAL ORDER Historically, November is a low demand month for the TOTES, product Consequently, the company is seeking ways to keep the production line running closer to full capacity during the month. One of TOTES top customers has asked them to produce a special tote for December. The customer is willing to pay extra for the tote. The customer wants to order 10,000 totes and will pay all freight costs The customer wants red, glittery fabric and an additional snowflake patch attached to the tote. The fabric will cost an additional $0.40 per tote, the snowflake patch wholesales at $1,000 per 10.000 patches, and sewing costs will increase by 0.15 per tote. The company has the capacity to produce these 10,000 additional totes in November and no additional equipment is required Complete Exhibit 5-A then answer the subsequent questions, EXHIBIT 5-A: Analysis of a special order - Variable costs T.O.T.E.S. Analysis of a Special Order costs per unit V Use data from the job cost card and Exhibit 2-8. Variable Cost Analysis Current DM Costs per tote $ Additional Fabric Cost per tote $ Other additional DM Costs Total Direct Material Cost per tote Current Direct Labor Cost per tote $ Additional Direct Labor Cost per tote $ Total Direct Labor Costs 5 $ Current MOH Cost per tote $ Additional MOH Cost per tote s Total MOH Costs per tote $ Total Variable Costs per tote 31 TOTES CASE STUDY-TETRA Why do we taken awant for this special order 3) Wham TOTES sul cure the customer for each special tote (ou WY How much would net income change TOTES. acepts the special order with no increase in pace Rote (Remember TOTES. is already a profitable company) (Round to the dollar). 4) How much would net income change if they increased the price to $5.20 for each customized toleron to the dollar)? 32 TOTES.CASE STUDY-TETILA OUTSOURCE THE CUTTING DEPARTMENT: MAKE-Bur DECISION Scenariu. TOTES Cabric supplier has offered to precut the fabric to TOTES pecifications for $0.60 per tote. The cost per yard of fabric would say the same. The Standart Cost Card from Exhibit- includes the breakout of direct labor costs. The company recently completed an Activity-Based Conting analysis that showed variable manufacturing overhead for the cutting department 1: 30.20 persone. In addition, the cutting machines could be sold for 550,000. Use Exhibit -B-1 for your analysis Hinta EXHIBIT 5-B-1 Scenario 1 Make-Buy Analysis T.O.T.ES Make-Buy Analysis Scenario 1 Current cor con be found on Exit Total Costs Cost per unit for 500,000 units Cost to Make Cost to Buy Outsource cutting department Direct Labor - Cutting Variable OH Costs - Cutting Sale of cutting machines Total Costs Total Cost per unit Only need to be concerned with the relevant costs Scenario Analysis: Based on the above information, should TOTES. outsource the cutting department? Why or why not? 33 TOTES Case Study - TETRA Name free app for a new product that SENTOT Sourcing do the cutting machine, they would The crownalysis, they have they could cara rinor 575.000 de costs of $20.000 if they added the exhibirourassa Hints HXHIRIT 5-11-22 Scenario 2 Make-buy Analysis TOTES Make-Buy Analysis Scenarisa Total Costs Total Costs from Scenario 1 Additional Contribution Margin Less Additional Fixed Costs Additional Net Oper. Income Net cost Remember: Additional income is on opportunity cost. Seong Should TOTES, outsource the cutting department if this additional product line is taken into consideration? Why or why not? 34 TOTES. CASE STUDY-TETRA UNPROFITABLE SEGMENT: DISCONTINUE OPERATING THE FACTORY STORE The cost accountants prepare Exhibit 5-C and present it to management cach quarter. Costs are traced or allocated to each division based on sales and actual division costs. Company-wide adeninistrative costs are allocated based on sales advertising and marketing costs are directly traced to each division. The online sales stall and product representatives are paid on commission, whereas the factory store sales stuff are sateeled und jobs would be eliminated if division was closed. For the last few years, the factory store has barely broken even and is operating at a loss. Based on the information in the most recent report, management must decide whether to keep the factory store open. After completing your analysis using Exhibit 5-C, state your recommendations by answering the questions on the next page EXHIBIT 5-C: Income by sales division TOTES Income Statement by Sales Division Factory Store TA 2.375.000 Productes 831,250 Online Sales 1.425.000 $ $ $ 5 $ 5 1,022,1605 57.000 $ 1 079 160 365,840 $ 596, 2605 61,7505 658 0105 173,2405 35,1105 5 851005 335705 1,703,600 118.750 1.822.350 552,650 Sales Variable Costs: COGS Personnel Total Contribution Margin Marketing, Advertising and Selling Admin Costs Salaries Allocated Admin and General Costs Total Fixed Costs Operating Income (Loss) $ 5 $ 5 $ 38 183 $ 5 179,7605 217.945 127 8975 38.1835 $ 104 160$ 143 04 30, 1975 38,183 $ 6,000 $ 14980 59,1635 125,593) 114.550 6.000 299.600 420 150 132.00 Analysis Contribution Margin Avoldable Costs Projected Change in Operating Income 35 TOTES CASE STUDY - TETRA How much will income increase or decrease) ir TOTES. closed the factory store? Should management keep the factory store open or close it? Why or why not? TOTES Case Study - TETRA Name: RELEVANT COSTS FOR SHORT TERM DECISION-MAKING LAR 5 Tonia and Tara have been considering expanding their operations. They have hired a cost accountant to help them analyze the cost-effectiveness of the following business opportunities and decisions: Special Order. One of TOTES.customers is interested in ordering a unique Christmas tote bag Outsource the cutting department. The company's fabric supplier has offered to deliver the fabric pre-cut, which would eliminate the cutting department Unprofitable segment. TOTES has three sales divisions: On-line, Product Representatives, and the Factory Store. In recent months, the Factory Store has shown an operating loss and management is considering closing the store. In this lab, students will evaluate specific short-term decisions based on the current company data and make recommendations to Tonia and Tara. 30 TOTES. CASE STUDY - TETRA SPECIAL ORDER Historically, November is a low demand month for the TOTES, product Consequently, the company is seeking ways to keep the production line running closer to full capacity during the month. One of TOTES top customers has asked them to produce a special tote for December. The customer is willing to pay extra for the tote. The customer wants to order 10,000 totes and will pay all freight costs The customer wants red, glittery fabric and an additional snowflake patch attached to the tote. The fabric will cost an additional $0.40 per tote, the snowflake patch wholesales at $1,000 per 10.000 patches, and sewing costs will increase by 0.15 per tote. The company has the capacity to produce these 10,000 additional totes in November and no additional equipment is required Complete Exhibit 5-A then answer the subsequent questions, EXHIBIT 5-A: Analysis of a special order - Variable costs T.O.T.E.S. Analysis of a Special Order costs per unit V Use data from the job cost card and Exhibit 2-8. Variable Cost Analysis Current DM Costs per tote $ Additional Fabric Cost per tote $ Other additional DM Costs Total Direct Material Cost per tote Current Direct Labor Cost per tote $ Additional Direct Labor Cost per tote $ Total Direct Labor Costs 5 $ Current MOH Cost per tote $ Additional MOH Cost per tote s Total MOH Costs per tote $ Total Variable Costs per tote 31 TOTES CASE STUDY-TETRA Why do we taken awant for this special order 3) Wham TOTES sul cure the customer for each special tote (ou WY How much would net income change TOTES. acepts the special order with no increase in pace Rote (Remember TOTES. is already a profitable company) (Round to the dollar). 4) How much would net income change if they increased the price to $5.20 for each customized toleron to the dollar)? 32 TOTES.CASE STUDY-TETILA OUTSOURCE THE CUTTING DEPARTMENT: MAKE-Bur DECISION Scenariu. TOTES Cabric supplier has offered to precut the fabric to TOTES pecifications for $0.60 per tote. The cost per yard of fabric would say the same. The Standart Cost Card from Exhibit- includes the breakout of direct labor costs. The company recently completed an Activity-Based Conting analysis that showed variable manufacturing overhead for the cutting department 1: 30.20 persone. In addition, the cutting machines could be sold for 550,000. Use Exhibit -B-1 for your analysis Hinta EXHIBIT 5-B-1 Scenario 1 Make-Buy Analysis T.O.T.ES Make-Buy Analysis Scenario 1 Current cor con be found on Exit Total Costs Cost per unit for 500,000 units Cost to Make Cost to Buy Outsource cutting department Direct Labor - Cutting Variable OH Costs - Cutting Sale of cutting machines Total Costs Total Cost per unit Only need to be concerned with the relevant costs Scenario Analysis: Based on the above information, should TOTES. outsource the cutting department? Why or why not? 33 TOTES Case Study - TETRA Name free app for a new product that SENTOT Sourcing do the cutting machine, they would The crownalysis, they have they could cara rinor 575.000 de costs of $20.000 if they added the exhibirourassa Hints HXHIRIT 5-11-22 Scenario 2 Make-buy Analysis TOTES Make-Buy Analysis Scenarisa Total Costs Total Costs from Scenario 1 Additional Contribution Margin Less Additional Fixed Costs Additional Net Oper. Income Net cost Remember: Additional income is on opportunity cost. Seong Should TOTES, outsource the cutting department if this additional product line is taken into consideration? Why or why not? 34 TOTES. CASE STUDY-TETRA UNPROFITABLE SEGMENT: DISCONTINUE OPERATING THE FACTORY STORE The cost accountants prepare Exhibit 5-C and present it to management cach quarter. Costs are traced or allocated to each division based on sales and actual division costs. Company-wide adeninistrative costs are allocated based on sales advertising and marketing costs are directly traced to each division. The online sales stall and product representatives are paid on commission, whereas the factory store sales stuff are sateeled und jobs would be eliminated if division was closed. For the last few years, the factory store has barely broken even and is operating at a loss. Based on the information in the most recent report, management must decide whether to keep the factory store open. After completing your analysis using Exhibit 5-C, state your recommendations by answering the questions on the next page EXHIBIT 5-C: Income by sales division TOTES Income Statement by Sales Division Factory Store TA 2.375.000 Productes 831,250 Online Sales 1.425.000 $ $ $ 5 $ 5 1,022,1605 57.000 $ 1 079 160 365,840 $ 596, 2605 61,7505 658 0105 173,2405 35,1105 5 851005 335705 1,703,600 118.750 1.822.350 552,650 Sales Variable Costs: COGS Personnel Total Contribution Margin Marketing, Advertising and Selling Admin Costs Salaries Allocated Admin and General Costs Total Fixed Costs Operating Income (Loss) $ 5 $ 5 $ 38 183 $ 5 179,7605 217.945 127 8975 38.1835 $ 104 160$ 143 04 30, 1975 38,183 $ 6,000 $ 14980 59,1635 125,593) 114.550 6.000 299.600 420 150 132.00 Analysis Contribution Margin Avoldable Costs Projected Change in Operating Income 35 TOTES CASE STUDY - TETRA How much will income increase or decrease) ir TOTES. closed the factory store? Should management keep the factory store open or close it? Why or why not