Name:
Section:
Score: 0%
Key Code:
1.
Ethylene Butane Ester
2.
Ethylene Butane Ester
Contribution margin per unit
Which product is the most profitable?
Explain:
3.
Revised Price of Ethylene:
Cells with non-gray backgrounds are protected and cannot be edited.
A red asterisk (*) will appear beside, above or below an incorrect answer.
Problem 12-6
Instructions
Answers are entered in the cells with gray backgrounds.
2
One way to revise the pricing would be to increase the price to the point where all
three products produce profitability equal to the highest profit product. This
would be determined as follows:
Revised price of Ester:
–
Unit Variable Cost
of Butane
=
Reactor Hours of Butane per Unit
Revised Price of
Butane
Name:
Section:
Score:
See student sheet for student’s score
Scoring:
1.
Ethylene Butane Ester
Selling price 400$ 350$ 250$
2.
Ethylene Butane Ester
Contribution margin per unit 100$ 100$ 80$
Reactor (bottleneck) hours per unit
1.0 0.8 0.5
Contribution margin per reactor hour 100$ 125$ 160$
3.
Revised Price of Ethylene:
Problem 12-6
SOLUTION
Instructions
One way to revise the pricing would be to increase the price to the point where all
three products produce profitability equal to the highest profit product. This
would be determined as follows:
A red asterisk (*) will appear beside, above or below an incorrect answer.
ON
Answers are entered in the cells with gray backgrounds.
Cells with non-gray backgrounds are protected and cannot be edited.
Revised Price of
Ethylene
–
Unit Variable Cost
of Ethylene
Revised Price of Butane:
–
Unit Variable Cost
of Butane
=
Reactor Hours of Butane per Unit
Revised Price of
Butane
Name:
Section:
Score: 0%
Key Code:
a.
Differential revenue:
Salvage of computer equipment
Differential expenses:
Purchase of layout work:
Number of pages
b.
From a financial perspective, is it advisable to purchase outside page layout services?
Explain:
c.
Important?
Indicate which of the following factors are important in determining whether the layout services should
be purchased and the current workers terminated.
Cells with non-gray backgrounds are protected and cannot be edited.
A red asterisk (*) will appear in the row immediately to the right of an incorrect answer.
WISCONSIN ARTS OF MILWAUKEE
Instructions
Proposal to Purchase Outside Page Layout Services
Answers are entered in the cells with gray backgrounds.
2
Exercise 12-7
Name:
Section:
Score: See student sheet for student’s score
Scoring:
a.
Differential revenue:
Salvage of computer equipment 6,500$
Differential expenses:
Purchase of layout work:
b.
From a financial perspective, is it advisable to purchase outside page layout services? Yes
Explain:
c.
Important?
ON
Answers are entered in the cells with gray backgrounds.
Exercise 12-7
SOLUTION
Instructions
Indicate which of the following factors are important in determining whether the layout services should
be purchased and the current workers terminated.
A red asterisk (*) will appear in the row immediately to the right of an incorrect answer.
WISCONSIN ARTS OF MILWAUKEE
Proposal to Purchase Outside Page Layout Services
Cells with non-gray backgrounds are protected and cannot be edited.
Name:
Section:
Score: 0%
Key Code:
a.
Annual costs and expenses – present machine
Annual costs and expenses – new machine
b.
From a financial perspective, is it advisable to replace the machine?
c.
Exercise 12-9
Instructions
Cells with non-gray backgrounds are protected and cannot be edited.
A red asterisk (*) will appear in the row immediately to the right of an incorrect answer.
SIDNEY TECHNOLOGIES
Proposal to Replace Machine
Important?
2
Answers are entered in the cells with gray backgrounds.
Indicate which of the following questions are important in determining whether the proposal should be
accepted and the old machine replaced.
Name:
Section:
Score: See student sheet for student’s score
Scoring:
a.
Annual costs and expenses – present machine 267,000$
Annual costs and expenses – new machine 227,000
b.
From a financial perspective, is it advisable to replace the machine? No
c.
Answers are entered in the cells with gray backgrounds.
Cells with non-gray backgrounds are protected and cannot be edited.
Important?
ON
Indicate which of the following questions are important in determining whether the proposal should be
accepted and the old machine replaced.
A red asterisk (*) will appear in the row immediately to the right of an incorrect answer.
Exercise 12-9
SOLUTION
Instructions
SIDNEY TECHNOLOGIES
Proposal to Replace Machine
Name:
Section:
Score: 0%
Key Code:
a.
Differential revenue from further processing per batch:
Revenue from sale of Decaf Columbian
Revenue from sale of Columbian Coffee
b.
Should the Company sell Columbian coffee and not process further to Decaf Columbian?
Explain:
c.
Increase in selling price of Decaf Columbian that would cause neither an advantage nor
disadvantage for processing further:
Net Disadvantage of Further Processing
Volume of Decaf Columbian
New price
Verify by completing the following:
A red asterisk (*) will appear in the row immediately to the right of an incorrect answer.
SPOKANE COFFEE COMPANY
Answers are entered in the cells with gray backgrounds.
Proposal to Process Columbian Coffee Further
=
=
Exercise 12-11
Instructions
2
Cells with non-gray backgrounds are protected and cannot be edited.
Name:
Section:
Score: See student sheet for student’s score
Scoring:
a.
Differential revenue from further processing per batch:
Revenue from sale of Decaf Columbian 57,500$
b.
Should the company sell Columbian coffee and not process further to Decaf Columbian? Yes
Explain:
c.
Increase in selling price of Decaf Columbian that would cause neither an advantage nor
disadvantage for processing further:
Net disadvantage of further processing $1,610
Volume of Decaf Columbian 4,600
New price $12.85
Verify by completing the following:
=
=
$0.35
A red asterisk (*) will appear in the row immediately to the right of an incorrect answer.
SPOKANE COFFEE COMPANY
Proposal to Process Columbian Coffee Further
Cells with non-gray backgrounds are protected and cannot be edited.
ON
Answers are entered in the cells with gray backgrounds.
Exercise 12-11
SOLUTION
Instructions
Name:
Section:
Score: 0%
Key Code:
a.
Per Unit Total
Differential revenue from accepting special offer
Differential costs from accepting special offer:
Direct materials
Direct labor
b.
Exercise 12-14
Instructions
Proposal to Sell to Rio Motors
=
2
Answers are entered in the cells with gray backgrounds.
Minimum price per unit
=
Cells with non-gray backgrounds are protected and cannot be edited.
A red asterisk (*) will appear below or immediately to the right of an incorrect answer.
MIRAMAR TIRE AND RUBBER COMPANY
Name:
Section:
Score: See student sheet for student’s score
Scoring:
a.
Per Unit Total
Differential revenue from accepting special offer 20.00$ 800,000$
Differential costs from accepting special offer:
Direct materials 10.00$
Direct labor 5.00
b.
$778,000
40,000
Minimum price per unit
ON
Cells with non-gray backgrounds are protected and cannot be edited.
MIRAMAR TIRE AND RUBBER COMPANY
Answers are entered in the cells with gray backgrounds.
=
=
A red asterisk (*) will appear below or immediately to the right of an incorrect answer.
Exercise 12-14
SOLUTION
Instructions
Proposal to Sell to Rio Motors
$19.45