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Akuntansi Manajemen Asistensi 11 (Decision Making and Relevant Information)
Akuntansi Manajemen Asistensi 11 (Decision Making and Relevant Information)
Akuntansi Manajemen Asistensi 11 (Decision Making and Relevant Information)
Development cost per unit for each product equals the total costs of developing the software product
divided by the anticipated unit sales over the life of the product. Marketing and administrative costs are
fixed costs in 2011, incurred to support all marketing and administrative activities of Basil Software.
Marketing and administrative costs are allocated to products on the basis of the budgeted revenues of
each product. The preceding unit costs assume Easyspread 2.0 will be introduced on October 1, 2011.
Required:
1. On financial considerations alone, should Miller introduce Easyspread 2.0 on July 1, 2011, or wait until
October 1, 2011? Show your calculations, identifying relevant and irrelevant revenues and costs.
2. What other factors might Larry Miller consider in making a decision?
Direct materials $5
Direct manufacturing labor $1
Manufacturing overhead $7
Total manufacturing cost $13
Manufacturing overhead cost per unit is based on variable cost per unit of $4 and fixed costs of $39,000
(at full capacity of 13,000 units). Marketing cost per unit, all variable, is $2, and the selling price is $26.
A customer, the Miami Company, has asked Wild Boar to produce 3,500 units of Orangebo, a modification
of Rosebo.
Orangebo would require the same manufacturing processes as Rosebo. Miami has offered to pay Wild
Boar $20 for a unit of Orangebo and share half of the marketing cost per unit.
Required:
1. What is the opportunity cost to Wild Boar of producing the 3,500 units of Orangebo? (Assume that no
overtime is worked.)
2. The Buckeye Corporation has offered to produce 3,500 units of Rosebo for Wolverine so that Wild
Boar may accept the Miami offer. That is, if Wild Boar accepts the Buckeye offer, Wild Boar would
manufacture 9,500 units of Rosebo and 3,500 units of Orangebo and purchase 3,500 units of Rosebo
from Buckeye. Buckeye would charge Wild Boar $18 per unit to manufacture Rosebo. On the basis of
financial considerations alone, should Wild Boar accept the Buckeye offer? Show your calculations.
3. Suppose Wild Boar had been working at less than full capacity, producing 9,500 units of Rosebo at
the time the Miami offer was made. Calculate the minimum price Wild Boar should accept for Orangebo
under these conditions. (Ignore the previous $20 selling price.)
Louisville Corporation produces baseball bats for kids that it sells for $32 each. At capacity, the company
can produce 50,000 bats a year. The costs of producing and selling 50,000 bats are as follows:
Required:
1. Suppose Louisville is currently producing and selling 40,000 bats. At this level of production and sales,
its fixed costs are the same as given in the preceding table. Ripkin Corporation wants to place a onetime
special order for 10,000 bats at $25 each. Louisville will incur no variable selling costs for this special
order. Should Louisville accept this one-time special order? Show your calculations.
2. Now suppose Louisville is currently producing and selling 50,000 bats. If Louisville accepts Ripkin’s
offer it will have to sell 10,000 fewer bats to its regular customers.
(a) On financial considerations alone, should Louisville accept this one-time special order?
(b) On financial considerations alone, at what price would Louisville be indifferent between accepting the
special order and continuing to sell to its regular customers at $32 per bat.
(c) What other factors should Louisville consider deciding whether to accept the one-time special order?
Problem 4 - International Outsourcing
Bernie’s Bears, Inc., manufactures plush toys in a facility in Cleveland, Ohio. Recently, the company
designed a group of collectible resin figurines to go with the plush toy line. Management is trying to
decide whether to manufacture the figurines themselves in existing space in the Cleveland facility or to
accept an offer from a manufacturing company in Indonesia. Data concerning the decision follows:
Required:
1. Should Bernie’s Bears manufacture the 400,000 figurines in the Cleveland facility or purchase them
Required from the Indonesian supplier? Explain.
2. Bernie’s Bears believes that the US dollar may weaken in the coming months against the Indonesian
Rupiah and does not want to face any currency risk. Assume that Bernie’s Bears can enter into a forward
contract today to purchase 27,300 IDRs for $3.40. Should Bernie’s Bears manufacture the 400,000
figurines in the Cleveland facility or purchase them from the Indonesian supplier? Explain.
3. What are some of the qualitative factors that Bernie’s Bears should consider when deciding whether
to outsource the figurine manufacturing to Indonesia?
Belmont Corporation has four operating divisions. The budgeted revenues and expenses for each division
for 2011 follows:
Required:
1. Calculate the increase or decrease in operating income if Belmont closes division A.
2. Calculate the increase or decrease in operating income if Belmont closes division B.
3. What other factors should the top management of Belmont consider before making a decision?