Coolbreeze Co manufactures refrigerators. The company isorganizedon a divisionalised basis and has two divisions (compressor and cabinet). The compressor division transfers 65% of its output to the cabinet division for $85 per unit, and sells the rest of its output to external companies for $92 per unit.a

The cabinet division sells the final product at an average selling price of $495 per unit. In the next month, it expected that the compressor division will produce 27,000 units. The variable cost of manufacturing compressors is $62 per unit.

What contribution will the compressor division generate in the next month?

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SolutionCo has prepared budgets based on the following assumptions:

Sales volumethree months to 30 September 2011:85,720 units three months to 31 December 2011:94,560 units

Inventory volumeat 1 July 2011:10% of sales for the next three months at 1 October 2011:75% of sales for the next three months

What is the budgeted production volume for the three months to 30 September 2011?

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Quastir Co manufactures a single product which sells for $48.80 per unit. At this selling price, theprofitper unit is $5.35, after apportionment of the $65,000 of fixed costs. The budgeted production and sales volume is 20,000 units.

What is the margin of safety, expressed in units (to the nearest unit)?

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Budgeted sales of X for December are 18,000 units. At the end of the production process for X, 10% of production units are scrapped as defective. Opening inventories of X for December are budgeted to be 15,000 units and closing inventories will be 11,400 units. All inventories of finished goods must have successfully passed the quality control check.

The production budget for X for December, in units, is:

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At 30 April 2010, the net assets of Barangia Co had a book value of $22,500,000 and an economic value of $29,900,000. The company’s weighted average cost of capital is estimated to be 16% per annum, and finance can currently be obtained at a rate of 14% per annum.

Net operatingprofitafter tax (NOPAT) has been calculated at $4,851,200.

What is the economic value added (EVA) for the company for the year to 30 April 2010?

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In the three months to 31 March 2013, Pegem Co paidlaborcosts of $62,597.60 for 6,760laborhours. This included 182 hours of non-productivelabor. The standardlaborcost of the product produced is $21.96, based on a standard time of 2.4 hours per unit.

What was thelaborrate variance for the three months to 31 March 2013?

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Toshi Ltd currently sets its selling price at $10, which achieves a 25% mark-up on variable cost.

Annual production and sales volume is 100,000 units and annual fixed costs are $80,000.

How much would the selling price need to be increased in order to double profit if costs, production and sales volume remain unchanged?

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As a result of completing a transaction, Deyal Co will receive an economic benefit in the future.

Which of the following items of financial statements should now berecognized?

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The marketing director of Peek Co has suggested that, despite an anticipated increase in variable cost per unit of $2, the selling price of the product manufactured by one of the divisions should be reduced by 3% to increase sales volume. The product is currently sold for $110 per unit which generates a contribution/sales ratio of 32%. Fixed costs for the next year are estimated to be $1,250,000.

What will be the breakeven sales volume in the next year (to the nearest unit)?

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The Getwellquick Hospital has total costs of $1m for 20X1. During 20X1, 200,000 patients were treated and doctors were paid $500,000.

What is the most appropriate cost per unit for the hospital to use?

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