Question 1. Mursel Mursel Travel Agency specializes in the operation of flights between Pristina and Los Angeles. It reserves the passengers tickets from Pristina to EUR900 Airways return tickets. Until last month, Prishtina Airways had paid Mursel Mursel Travel Agency commission 10% of the ticket price for each traveler. The Commission represents the only source of income for Mursel Mursel Travel Agency. Mursel Mursel fixed costs are EUR14,000 per month (for salaries, rent and other) and variable costs are EUR 20 for a ticket purchased for a traveler. These include 15 euro 20 euro for ticket delivery fee for each traveler to travelers that I paid mailing company DHL.
(To simplify the analysis, we assume that each return ticket submitted a package of DHL separately. Therefore, 15 euro fee delivery postal ticket applied to each ticket.) Prishtina Airways has just announced a timetable revised payment of all travel agencies. Now will pay travel agencies a commission of 10% on tickets costing a maximum of 50 euros. Each ticket which cost more than 500 euros, then the Commission is only 50 euros regardless of the ticket price.
a. Under the scheme of payment of commissions of 10%, as Mursel Mursel airline ticket must sell each month to reach a) the point of equilibrium and b) to gain operating profit of 7,000 EUR?
b. How does changing the payment deadline of Prishtina in Perge sponse Airways under a and b of question 1?
Question 2. Dardan Rinori owned company headquartered in Butovc Krasniqi using normal system of labor costs at its plant for the production of smoke, peanuts, biscuits and cream-banana. The factory has the production department and packaging. Its system of spending by work recognizes two categories of direct costs (materials and direct labor in manufacturing) and two sets of costs sunk (overhead) (cost overhead production department that are divided by the actual number of hours of work car manufacturing and overhead costs of the packaging department based on current direct production costs). The budget for 2011 for Rinori factory is as follows:
| |
Production Department |
Department of packaging |
| Manufacturing overhead costs |
$1,800,000 |
$3,600,000 |
| Direct labor costs in manufacturing |
$1,400,000 |
$2,000,000 |
| Direct labor hours in production |
100,000 |
200,000 |
| Hours car |
50,000 |
200,000 |
a. Calculate the rate budgeted production overhead expenditures for each department.
b. In February, the expenditure for the work 494 to produce smoke to order the company ETC is presented as follows:
Production department Department of packaging
Material directly $45,000 $70,000
The direct labor costs in manufacturing $14,000 $15,000
Direct labor hours in production 1,000 1,500
Hours car 2,000 1,000
Calculate the total labor costs of production of Smoke 494 for ETC-in.
Question 3. Viva Fresh Store operates at full capacity and decided to apply the analysis of expenses by ABC (Activity Based Costing) for three lines of its products: 1) baked goods, 2) milk and fruit juice and 3) food frozen. It identifies four activities and expenditure rates for activities are as follows:
| Ordering |
$ 100 for a purchase order |
| Delivery and receipt of goods over |
$80 |
| Placing the shelves |
$20 an hour |
| Customers support and assistance of |
$0.20 for a commodity to sell |
Revenue, cost of goods sold, costs of support to the store, which includes activities in support of the shop expenses and basis of allocation of expenses by the three product lines is presented below:
|
Baked goods |
Milk and juices |
Frozen Products |
| Financial data |
|
|
|
| Income |
$57,000 |
$63,000 |
$52,000 |
| Cost of goods sold |
$38,000 |
$47,000 |
$35,000 |
| Support Store |
$11.40 |
$14.10 |
$10,500 |
| The basis of allocation of expenses |
|
|
|
|
|
|
|
| Commissioning ( purchase orders ) |
30 |
25 |
'13 |
| Delivery |
98 |
36 |
28 |
| Placing the shelves |
183 |
166 |
24 |
| Customer support |
7,900 |
15,500 |
20,500 |
Based on a simple system Viva Fresh Store expenditure allocated support costs through products stores at the rate of 30% of the cost of goods sold.
a. Use simple system costs and prepare the report profitability by product line for Viva Fresh Store.
b. Use the ABC system to prepare the report profitability by product lines for Viva Fresh Store.
c. What new insights ABC system provides for decision-making for managers Viva Fresh Store?
Question 4. Korporation Ducki JSC manufactures and sells mobile phones and uses standard cost system. The actual data for January, February and March 2012 are presented below:
|
January |
February |
March |
| The data in units |
|
|
|
| Merchandise at the beginning of the period |
0, |
300, |
300 |
| Production |
1,000 |
800 |
1,250 |
| Sales |
700, |
800 |
1,500 |
| variable costs |
|
|
|
| Unit production costs |
$900 |
$900 |
$900 |
| Marketing costs per unit $600 |
$600 |
$600 |
|
| fixed costs |
|
|
|
| Production expenses |
$400,000 |
$400,000 |
$400,000 |
| Marketing expenses |
$140,000 |
$140,000 |
$140,000 |
Selling price per unit is $ 500 budgeted level of production used to calculate the budgeted fixed costs per unit of production is 1,000 units.
a. Prepare the balance of the success Ducki Corporation JSC for January, February and March 2012 on the basis of 1) Variable system costs and 2) absorption system costs.
b. Explain the difference in operating profit for January, February and March on the basis of absorbent system and the variable costs.
Variable production costs per unit of Ducki Corporation mobile phones are as follows:
|
January |
February |
March |
| direct materials |
$100 |
$100 |
$100 |
| Direct labor costs per unit output |
$70 |
$70 |
$70 |
| Manufacturing overhead costs for nëjsi |
$130 |
$130 |
$130 |
|
$300 |
$300 |
$300 |
Prepare the balance of the success Ducki Corporation JSC for January, February and March 2012 by spending supervariabil system.
Question 5. Blakaj Corporation produces intelligent temperature regulator to regulate the room temperature according to the disposition of the inhabitants. Blakaj Corporation produces plates for these regulatory his mother. Blakaj Corporation reports the following information about the costs of manufacturing motherboards for temperature regulators for 2011 and anticipated expenditures in 2012:
| Current expenditure 2011 2012 Expected Costs |
|
|
| Variable production costs |
|
|
| direct materials |
$180 |
$170 |
| The direct labor costs |
$50 |
$45 |
| Variable production costs a group of tiles installed |
|
|
| materials handling and control |
|
|
| quality |
$1.60 |
$1.50 |
|
|
|
| Fixed production costs |
|
|
| Fixed overhead costs that can be avoided if the tablets are produced |
|
|
| but purchased |
$320,000 |
$320,000 |
| Depreciation fixed overhead costs |
|
|
| insurance and administration not can be avoided regardless |
|
|
| not manufacturing or production of tiles $800,000 |
$800,000 |
|
Blakaj Corporation produces 8,000 plates in 2011 to 40 packs of 200 of them in each package. In 2012 Blakaj Corporation predicts that the need will increase to 10,000 motherboard. Tablets will be manufactured in 80 packs 125 each. Grulaj Corporation approached Blakaj company to supply motherboards for termorregullatorë in 2012 at a price of $ 300 for the tablet under any timetable that suits Blakaj Corporation.
a. Calculate the expected total costs of production of motherboards for the unit in 2012.
b. Suppose that the current production capacity of the motherboards will be zero if Blakaj buys tiles from Grulaj Corporation. Based on the financial aspect should Blakaj produce tablets or buy from Grulaj Corporation
c. Now suppose that if Blakaj parent buys from Grulaj tiles, the best option of using production capacity of Blakaj termorregullatorëve Corporation is to produce and sell special termorregullatorë company TRR3 Gashi Corporation. Blakaj Corporation calculates the income and expenses arising from incremental production termorregullatorëve TRR3:
Total revenues anticipated incremental $2,000,000
The total incremental costs expected $2,150,000
Under this scenario must purchase a home by Grulaj Blakaj tiles?
Question 6. Suva Reka Corporation Veselaj Butrint is owned manufacturer of window frames. Each frame passes through two departments: the assembly and final goods. This task focuses on the assembly department. The system costs by process of Suva Reka Corporation has a single category of direct costs (direct materials) and a single category of shpenzimete indirect costs (conversion). Direct materials are added when the assembly process at the department level has reached 10%. Added conversion costs evenly during the assembly process at the department. Suva Reka Corporation uses the method of average system costs by process. Consider these data for the department assembly in April 2012:
|
Physical Unit (frames) |
direct material |
costs of conversion |
| Work in progress, April 1 |
95 |
$1.67 |
$988 |
| It began in April 2012 |
490 |
|
|
| Completed in April 2012 |
455 |
|
|
| Work in progress, April 30 |
130 |
|
|
| Total expenses increased during April |
$2,012.00 |
$17,640.00 |
$11,856 |
a. Summarize the total costs for the assembly department in April 2012 and set the total costs of completed units (and transferred out) and work units at the end of the process during the production cycle.
b. Check duty system under FIFO method of expenses by the process.
Question 7. ProChips is a manufacturer of computer chips prototypes headquartered in Dublin, Ireland. In the following year, 2012 ProChips expects to provide 552 computer chip prototypes at an average price of $ 80,000. Head of marketing ProChips predicts rise to 60 prototypes of chips for a year until 2018. This means that the demand will be 552 in 2012, 612 in 2013, 672 in 2014 and so on. The factory can not produce more than 540 prototypes of chips for a year. To meet demand in the future, ProChips must modernize or replace plant or factory with new machines. The old are completely depreciated and can be sold for $ 3,600,000 if the factory replaced. If the cost of modernization modernized factory must be capitalized and depreciated over the useful economic life of modernized factory. The old option held as part of the modernization of the factory. The data for both options are outlined below:
|
Modenizuar |
Substituting |
| The initial investment in 2012 |
$33,600,000 |
$58,800,000 |
| Terminal value of disposing 2018 |
$6,000,000 |
$14,400,000 |
| The useful life 7 years 7 years |
$62,000 |
$56,000 |
| The total annual operating costs for chip |
|
|
ProChips uses linear depreciation assuming zero value flips terminals. For purposes of simplicity let's assume that we have no change in prices or costs in the coming years
The required return on investment of 12% ProChips. We do not have any difference between modernization and the replacement option in terms of capital required to ents. ProChips enjoys tax exemption until 2018.
a. Calculate the return on investment period (payback period) for upgrading and replacement option.
b. Calculate NPV of modernization and the replacement option.