Problem 5 A company manufactures product A, B and C. The actual joint expenses of manufacture for a period were RO 63,000. It was estimated that profits on each product as a percentage of sales would be 30%, 25% and 15% respectively. Subsequent expenses were: A в Material RO 1000 RO 750 RO 250 Direct wages RO 2000 RO 1250 RO 500 Overheads RO 1500 RO 1250 RO 750 Total RO 4500 RO 3250 RO 1500 Sales RO 60,000 RO 40,000 RO 25,000

Question 6 Amundsen Company makes 60,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct Materials Direct Labor Variable Manufacturing Overhead Fixed Manufacturing Overhead Variable Selling Fixed Selling Total $ 10.10 $17.40 $ 2.70 $15.00 $ 2.75 $ 3.25 $51.20 An outside supplier has offered to sell the company all of these parts it needs. If the company accepts this offer, the facilities now being used to make the part would be idle and fixed manufacturing overhead would be reduced by 80% of current cost. The variable selling costs would be reduced to 40% of current cost. Required: What is the maximum amount the company should be willing to pay an outside supplier per unit for the part?

Selling price per unit              $      100Variable expenses per unit     $        40Fixed expenses per month     $ 60,000   The break-even point volume of units is:   a. 0     b. 360     c. 720     d. 1000

Question 2 Pisang Berhad produces 500,000 switches per year with the following costs: (For the production of 500,000 switches) RM Direct materials 1,000,000 Direct labour 750,000 Variable manufacturing expenses 300,000 450,000 Fixed manufacturing expenses Total cost 2,500,000 RM5/unit Cost/per unit RM2,500,000/500,000 units + A supplier has approached the company, and offered the switches at RM4 per unit. Should the company decided to purchase from the supplier, the company need to employ an incoming quality controller with a salary of RM70,000 per annum. Other than this, all the other fixed manufacturing expenses will remain unchanged. Required: a) Should Pisang Berhad continue with the production of switches internally, or to purchase the switches from the external supplier? Support your answer with appropriate calculations. b) Will your answer change if the facilities freed up by the company can be used to do alternative works that will contribute an annual profit of RM50,000? Why?…