Please solve Problem 3-11 from your textbook(Introduction to Managerial Accounting; Fifth Canadian Edition, byBrewer,...Please...

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Accounting

Please solve Problem 3-11 from your textbook(Introduction to Managerial Accounting; Fifth Canadian Edition, byBrewer, Garrison, Noreen, Kalagnanam, and Vaidyanathan) consideringthe following new information and requirements:

The company received a request for a 300-Kgorder of potassium aspartate.

The customer offers to pay $12.50per Kg forthis order.

The company usually adds a 30%markup for thistype of orders.

Material requirements

Material

Required Quantity (per Kg)

Price ($) per Kg

Aspartic Acid

190.00

5.75

Citric Acid

10.00

2.00

K2CO3

120.00

4.50

Rice

30.00

.50

The company pays its production workers an average of$20.00per hour plus $5.00per houradditional labour costs.

Expected direct labour time was 16 hours.

The company also estimated the following:

Materials related overhead

$585,000

Labour related overhead

$1,950,000

Direct material costs

$1,850,000

Direct labour cost

$1,250,000

Prepare a job cost sheet for the proposed job.  Ignorethe job completion status area. (9 points)

What is the gross margin expressed in %, if the customer agreesto pay a price of cost plus 25%? (1 point). Please show all yourcalculations. (1 point)

What is the total gross margin per total order (expressed indollar amount) (1 point). Please clearly show all you calculations.(1 point)

What is the gross margin per unit (per Kg) (expressed in dollaramount).  (1 point) Please clearly show all yourcalculations. (1 point)

Assume that the actual production level was only 280 Kg despiteusing the expected quantity of materials andlabour.  What is the gross margin of this order:percentage-wise (1 point), total gross margin per order (dollaramount)(1 point), gross margin per unit (per Kg)(dollar amount)(1point). Please clearly show all you calculations. (1 point)

Solution b:

Total expected cost of order = $3,218.76

Solution c:

Unit (per Kg) cost of this order = $3,218.76 / 300 = $10.73 perkg

Solution d:

Required selling price considering 30% markup = $10.73 + 30% of$10.73 = $13.95 per Kg

Price offered by customer = $12.50 per Kg

As price offered by customer is lesser than minimum requiredprice therefore company should not accept price offered bycustomer.

Solution e:

If customer agree to pay cost + 25% then

Let cost = $100

Selling price = $125

Gross margin = $125 - $100 = $25

Gross margin percentage = $25 / $125 = 20%

The solutions are to help complete the following questionsabove

And please solve the questions based on the 30% mark up.

Answer & Explanation Solved by verified expert
4.0 Ratings (724 Votes)
1 computation of job costing for the proposed job JOB COST SHEET particulars amount amount direct materials quantity price per kg asparic acid 190 575 109250 citric acid 10 2 20 k2co3 120 450 540 rice 30 050 15 total direct material cost 16675 direct labor labor hour cost per hour 16 25 400 overheads material related working    See Answer
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In: AccountingPlease solve Problem 3-11 from your textbook(Introduction to Managerial Accounting; Fifth Canadian Edition, byBrewer,...Please solve Problem 3-11 from your textbook(Introduction to Managerial Accounting; Fifth Canadian Edition, byBrewer, Garrison, Noreen, Kalagnanam, and Vaidyanathan) consideringthe following new information and requirements:The company received a request for a 300-Kgorder of potassium aspartate.The customer offers to pay $12.50per Kg forthis order.The company usually adds a 30%markup for thistype of orders.Material requirementsMaterialRequired Quantity (per Kg)Price ($) per KgAspartic Acid190.005.75Citric Acid10.002.00K2CO3120.004.50Rice30.00.50The company pays its production workers an average of$20.00per hour plus $5.00per houradditional labour costs.Expected direct labour time was 16 hours.The company also estimated the following:Materials related overhead$585,000Labour related overhead$1,950,000Direct material costs$1,850,000Direct labour cost$1,250,000Prepare a job cost sheet for the proposed job.  Ignorethe job completion status area. (9 points)What is the gross margin expressed in %, if the customer agreesto pay a price of cost plus 25%? (1 point). Please show all yourcalculations. (1 point)What is the total gross margin per total order (expressed indollar amount) (1 point). Please clearly show all you calculations.(1 point)What is the gross margin per unit (per Kg) (expressed in dollaramount).  (1 point) Please clearly show all yourcalculations. (1 point)Assume that the actual production level was only 280 Kg despiteusing the expected quantity of materials andlabour.  What is the gross margin of this order:percentage-wise (1 point), total gross margin per order (dollaramount)(1 point), gross margin per unit (per Kg)(dollar amount)(1point). Please clearly show all you calculations. (1 point)Solution b:Total expected cost of order = $3,218.76Solution c:Unit (per Kg) cost of this order = $3,218.76 / 300 = $10.73 perkgSolution d:Required selling price considering 30% markup = $10.73 + 30% of$10.73 = $13.95 per KgPrice offered by customer = $12.50 per KgAs price offered by customer is lesser than minimum requiredprice therefore company should not accept price offered bycustomer.Solution e:If customer agree to pay cost + 25% thenLet cost = $100Selling price = $125Gross margin = $125 - $100 = $25Gross margin percentage = $25 / $125 = 20%The solutions are to help complete the following questionsaboveAnd please solve the questions based on the 30% mark up.

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