Task $1(8$ marks: $2$ marks for each requirement$)$

Management accountants help gather and analyze relevant information to compare alternatives.

Demonstrate critical knowledge and understanding of the questions that managerial accountant should consider before agreeing to the special deal.

Illustrate an extensive knowledge and understanding of questions managers must consider when deciding whether to discontinue a product line, department, or retail store location.

Illustrate an extensive knowledge and understanding of questions managers must consider when deciding whether to sell as is or process further.

Demonstrate critical knowledge and understanding of the four different methods of costs that can be used as a basis for calculating the price.

Answer

XXX

Do we have excess capacity available to fill this order?

Will the reduced sales price be high enough to cover the incremental costs of filling the order $($the variable costs of filling the order and any additional fixed costs$)?$

Will the special order affect regular sales in the long run?

XXXX

Does the product provide a positive contribution margin?

Are there any fixed costs that can be avoided if we discontinue the product?

Will discontinuing the product affect sales of the company's other products?

What could we do with the freed capacity?

XXX

How much revenue will we receive if we sell the product as is$?$

How much revenue will we receive if we sell the product after processing it further?

How much will it cost to process the product further?

XXX

Variable Manufacturing Costs.

Total Variable Costs.

Total Manufacturing Costs.

Total Costs $($Full Costs$).$