Gardena Ltd.is a medium-sized company engaged in the production and sale of garden furniture. During the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Gardena Ltd.is a medium-sized company engaged in the production and sale of garden furniture. During the past financial year demand for all three of their products, Benches, Tables and Loungers increased significantly. The company is currently preparing its budget for the forthcoming period and has just received information from their Malaysian material supplier, that the amount of wood available next year will be 25% less than was available in the current year. The following information in relation to all three products is provided: Bench Table Lounger $200 Selling Price Costs per unit Direct material - Wood per unit $250 $180 $100 $40 $10 $80 $60 $20 $10 $60 $40 Direct labour Variable overheads $20 Fixed overheads $10 $10 Notes: 1. The amount of material that was available in the current year was 80,000 square meters and the price per square meter was S10.The price of the wood will not increase in the forthcoming year. 2. Fixed overheads are absorbed into products on a unit basis. Total fixed overheads are estimated at $110,000 for the forthcoming year. 3. Demand for each of the products is forecast as follows for the forthcoming year: Bench 2,000 units Table 5,000 units Lounger 4,000 units Required: (a) Determine the optimum production plan for Gardena Ltd. and state the profit that it would yield. (15 marks) Gardena Ltd.is a medium-sized company engaged in the production and sale of garden furniture. During the past financial year demand for all three of their products, Benches, Tables and Loungers increased significantly. The company is currently preparing its budget for the forthcoming period and has just received information from their Malaysian material supplier, that the amount of wood available next year will be 25% less than was available in the current year. The following information in relation to all three products is provided: Bench Table Lounger $200 Selling Price Costs per unit Direct material - Wood per unit $250 $180 $100 $40 $10 $80 $60 $20 $10 $60 $40 Direct labour Variable overheads $20 Fixed overheads $10 $10 Notes: 1. The amount of material that was available in the current year was 80,000 square meters and the price per square meter was S10.The price of the wood will not increase in the forthcoming year. 2. Fixed overheads are absorbed into products on a unit basis. Total fixed overheads are estimated at $110,000 for the forthcoming year. 3. Demand for each of the products is forecast as follows for the forthcoming year: Bench 2,000 units Table 5,000 units Lounger 4,000 units Required: (a) Determine the optimum production plan for Gardena Ltd. and state the profit that it would yield. (15 marks)
Expert Answer:
Related Book For
Fundamental Accounting Principles
ISBN: 978-0078110870
20th Edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
Posted Date:
Students also viewed these accounting questions
-
For a certain manufacturer, the production and sale of each additional unit yields an additional profit of $10. The sale of 1000 units yields a profit of $4000. (a) Find the profit equation. (b) Find...
-
The following costs result from the production and sale of 4,000 drum sets manufactured by Vince Drum Company for the year ended December 31, 2011. The drum sets sell for $250 each. The company has a...
-
The following costs result from the production and sale of 1,000 drum sets manufactured by Tight Drums Company for the year ended December 31, 2015. The drum sets sell for $500 each. The company has...
-
At the intersection of Texas Avenue and University Drive, a yellow subcompact car with mass 950 kg traveling east on University collides with a red pickup truck with mass 1900 kg that is traveling...
-
This question considers how the FX market will respond to changes in monetary policy. For these questions, define the exchange rate as Korean won per Japanese yen, EWON/. Use the FX and money market...
-
Variable costs are always relevant, and fixed costs are always irrelevant. Do you agree? Why?
-
What is the default filename that make will process if no other is given?
-
Flexible budgets, 4-variance analysis. (CMA, adapted) Nolton Products uses standard costing allocates manufacturing overhead (both variable and fixed)to products on the basis of standard direct...
-
TheOnlyWizKid, Montclair State University Download and connect to the raw data Market Caps of S_P500 Companies 2008-2015.xls on Canvas>Files> Tableau Data Files using Tableau. The Excel file lists...
-
Beverly sells donuts at the local bakery. Donuts cost $.50 each unless customers buy a dozen or more. When customers buy at least a dozen they cost $.40 each. Beverly earns a commission based on her...
-
1. The mechanic knew either the oil filter was clogged or the oil pump was defective. He just replaced the oil filter. If he has replaced the oil filter, then he knew the oil pump is defective....
-
Define the required rate of return on common equity. How is it measured?
-
What is the difference between the IRR and the MIRR?
-
What is an incremental cash flow? What is a sunk cost? Why must you account for opportunity costs?
-
What practical problems are encountered in using the CAPM to estimate common equity capital cost?
-
What is the difference between dividend yield and capital gain yield?
-
This lesson will explore the definitions of metrics and the various terms associated with it, along with brief explanations about how these different terms work within organizations to support their...
-
You are a U.S. investor who purchased British securities for 2,000 one year ago when the British pound cost U.S. $1.50. What is your total return (based on U.S. dollars) if the value of the...
-
At the end of the current year, the following information is available for both West Elm Company and East Park Compan Required 1. Compute the debt-to-equity ratios for both companies. 2. Comment on...
-
Computa-Cations buys its product for $20 and sells it for $50 per unit. The sales staff receives a 10% commission on the sale of each unit. Its June income statement follows. Management expects Junes...
-
For each of the following three separate cases, use the information provided about the calendar-year 2012 operations of Sahim Company to compute the required cash flowinformation. Case A: Compute...
-
Which of the following best describes the underlying rationale for a written investment policy statement (IPS)? A. A written IPS communicates a plan for trying to achieve investment success. B. A...
-
Which of the following is least important as a reason for a written investment policy statement (IPS)? A. The IPS may be required by regulation. B. Having a written IPS is part of best practice for a...
-
Which of the following is least likely to be placed in the appendices to an investment policy statement (IPS)? A. Rebalancing Policy. B. Strategic Asset Allocation. C. Statement of Duties and...
Study smarter with the SolutionInn App