Acc501 Week 3
HELP MASTER OF BUSINESS ADMINISTRATION
NOVEMBER 2012 INTAKE 8, HANOI
ACC501 Business ACCOUNTING & FINANCE
ASSIGNMENT 1
Due date :
Word limit : N/A
Weighting : 30% of total marks for the subject
Facilitator : Dr. Yap Kim Len
Question 1 (22 marks)
The condensed income statement for the Terri and Jerri partnership for 2010 is as follows.
TERRIF AND JERRI COMPANYIncome StatementFor the Year Ended December 31, 2010 | | | | | | Sales (200,000 units) | | | | $1,200,000 | Cost of goods sold | | | | 800,000 | Gross profit | | | | 400,000 | Operating expenses | | | | | Selling | | $280,000 | | | Administrative | | 160,000 | | 440,000 | Net loss | | | | ($40,000) |
A …show more content…
If Tropica is purchased, the excess space will be used to store Martinez’s finished product. Currently, Martinez rents storage space at approximately $0.60 per unit stored per year. Approximately 6,000 units per year are stored in the rented space.
Instructions
(a) Prepare an incremental analysis for the make-or-buy decision. Should Martinez make or buy the part? Why? (8 marks)
(b) Prepare an incremental analysis assuming the released facilities can be used to produce $10,000 of net income in addition to the savings on the rental of storage space. What decision should now be made? (5 marks)
(c) What nonfinancial factors should be considered in the decision? (7 marks)
Question 3 (8 marks) (26-5B)
Betty Dillman is an accounting major at a Midwestern state university located approximately 60 miles from a major city. Many of the students attending the university are from the metropolitan area and visit their homes regularly on the weekends. Betty, an entrepreneur at heart, realizes that few good commuting alternatives are available for students doing weekend travel. She believes that a weekend commuting service could be organized and run profitably from several suburban and downtown shopping mall locations. Betty has gathered the following investment …show more content…
This normally results in a modest increase in the total amount available for manufacturing costs and cuts in the marketing expense and corporate office expense budgets. The total sales and net income figures proposed by the president are seldom changed. Although the participants are seldom pleased with the compromise, these budgets are final. Each executive then develops a new detailed budget for the operations in his or her
NOVEMBER 2012 INTAKE 8, HANOI
ACC501 Business ACCOUNTING & FINANCE
ASSIGNMENT 1
Due date :
Word limit : N/A
Weighting : 30% of total marks for the subject
Facilitator : Dr. Yap Kim Len
Question 1 (22 marks)
The condensed income statement for the Terri and Jerri partnership for 2010 is as follows.
TERRIF AND JERRI COMPANYIncome StatementFor the Year Ended December 31, 2010 | | | | | | Sales (200,000 units) | | | | $1,200,000 | Cost of goods sold | | | | 800,000 | Gross profit | | | | 400,000 | Operating expenses | | | | | Selling | | $280,000 | | | Administrative | | 160,000 | | 440,000 | Net loss | | | | ($40,000) |
A …show more content…
If Tropica is purchased, the excess space will be used to store Martinez’s finished product. Currently, Martinez rents storage space at approximately $0.60 per unit stored per year. Approximately 6,000 units per year are stored in the rented space.
Instructions
(a) Prepare an incremental analysis for the make-or-buy decision. Should Martinez make or buy the part? Why? (8 marks)
(b) Prepare an incremental analysis assuming the released facilities can be used to produce $10,000 of net income in addition to the savings on the rental of storage space. What decision should now be made? (5 marks)
(c) What nonfinancial factors should be considered in the decision? (7 marks)
Question 3 (8 marks) (26-5B)
Betty Dillman is an accounting major at a Midwestern state university located approximately 60 miles from a major city. Many of the students attending the university are from the metropolitan area and visit their homes regularly on the weekends. Betty, an entrepreneur at heart, realizes that few good commuting alternatives are available for students doing weekend travel. She believes that a weekend commuting service could be organized and run profitably from several suburban and downtown shopping mall locations. Betty has gathered the following investment …show more content…
This normally results in a modest increase in the total amount available for manufacturing costs and cuts in the marketing expense and corporate office expense budgets. The total sales and net income figures proposed by the president are seldom changed. Although the participants are seldom pleased with the compromise, these budgets are final. Each executive then develops a new detailed budget for the operations in his or her