Costos Toma De Desiciones Unidad 11

CHAPTER 11

DECISION MAKING AND RELEVANT INFORMATION

11-16 (20 min.) Disposal of assets.

1. This is an unfortunate situation, yet the $75,000 costs are irrelevant regarding the decision to remachine or scrap. The only relevant factors are the future revenues and future costs. By ignoring the accumulated costs and deciding on the basis of expected future costs, operating income will be maximized (or losses minimized). The difference in favor of remachining is $2,000:

(a) (b)

Remachine Scrap

Future revenues $30,000 $3,000

Deduct future costs 25,000 –

Operating income $ 5,000 $3,000

Difference in favor of remachining $2,000

2. This, too, is an unfortunate situation. But the $100,000 original cost is irrelevant to this decision. The difference in relevant costs in favor of rebuilding is $5,000 as follows:

(a) (b)

Replace Rebuild

New truck $105,000 –

Deduct current disposal

price of existing truck 15,000 –

Rebuild existing truck – $85,000

$ 90,000 $85,000

Difference in favor of rebuilding $5,000

Note, here, that the current disposal price of $15,000 is relevant, but the original cost (or book value, if the truck were not brand new) is irrelevant.

11-17 (20 min.) Relevant and irrelevant costs.

1.

Make Buy

Relevant costs

Variable costs $180

Avoidable fixed costs 20

Purchase price ____ $210

Unit relevant cost $200 $210

Dalton Computers should reject Peach’s offer. The $30 of fixed costs are irrelevant because they will be incurred regardless of this decision. When comparing relevant costs between the choices, Peach’s offer price is higher than the cost to continue to produce.

2.

Keep Replace Difference

Cash operating costs (4 years) $80,000 $48,000 $32,000

Current disposal value of old machine (2,500) 2,500

Cost of new machine ______ 8,000 (8,000)

Total relevant costs $80,000 $53,500 $26,500

AP Manufacturing should replace the old machine. The cost savings are far greater than the cost to purchase the new machine.

11-18 (15 min.) Multiple choice.

1. (b) Special order price per unit $6.00

Variable manufacturing cost per unit 4.50

Contribution margin per unit $1.50

Effect on operating income = $1.50  20,000 units

= $30,000 increase

2. (b) Costs of purchases, 20,000 units  $60 $1,200,000

Total relevant costs of making:

Variable manufacturing costs, $64 – $16 $48

Fixed costs eliminated 9

Costs saved by not making $57

Multiply by 20,000 units, so total

costs saved are $57  20,000 1,140,000

Extra costs of purchasing outside 60,000

Minimum overall savings for Reno 25,000

Necessary relevant costs that would have

to be saved in manufacturing Part No. 575 $ 85,000

11-19 (30 min.) Special order, activity-based costing.

1. Award Plus’ operating income under the alternatives of accepting/rejecting the special order are:

Without One-Time Only Special Order

7,500 Units With One-Time Only Special Order

10,000 Units

Difference

2,500 Units

Revenues $1,125,000 $1,375,000 $250,000

Variable costs:

Direct materials 262,500 350,0001 87,500

Direct manufacturing labor 300,000 400,0002 100,000

Batch manufacturing costs 75,000 87,5003 12,500

Fixed costs:

Fixed manufacturing costs 275,000 275,000 ––

Fixed marketing costs 175,000 175,000 ––

Total costs 1,087,500 1,287,500 200,000

Operating income $ 37,500 $ 87,500 $ 50,000

1  10,000 2  10,000 3$75,000 + (25  $500)

Alternatively, we could calculate the incremental revenue and the incremental costs of the additional 2,500 units as follows:

Alternativamente, podríamos calcular los ingresos incrementales y los costos incrementales de las 2.500 unidades adicionales de la siguiente manera:

Incremental revenue $100  2,500 $250,000

Incremental direct manufacturing costs  2,500 87,500

Incremental direct manufacturing costs  2,500 100,000

Incremental batch manufacturing costs $500  25 12,500

Total incremental costs 200,000

Total incremental operating income from

accepting the special order $ 50,000

Award Plus should accept the one-time-only special order if it has no long-term implications because accepting the order increases Award Plus’ operating income by $50,000.

If, however, accepting the special order would cause the regular customers to be dissatisfied or to demand lower prices, then Award Plus will have to trade off the $50,000 gain from accepting the special order against the operating income it might lose from regular customers.

debe aceptar la orden especial sólo una vez si no tiene consecuencias a largo plazo, porque aceptar la orden aumenta ingreso operativo Premio Plus' por $50,000.If, sin embargo, aceptar que la orden especial causaría los clientes regulares de estar descontentos o demandar precios más bajos, luego Premio Plus tendrá para el comercio de los 50.000 $ ganancia de aceptar la orden especial contra el margen de explotación que podría perder de clientes regulares.

2. Award Plus has a capacity of 9,000 medals. Therefore, if it accepts the special one-time order of 2,500 medals, it can sell only 6,500 medals instead of the 7,500 medals that it currently sells to existing customers. That is, by accepting the special order, Award Plus must forgo sales of 1,000 medals to its regular customers. Alternatively, Award Plus can reject the special order and continue to sell 7,500 medals to its regular customers.

Award Plus’ operating income from selling 6,500 medals to regular customers and 2,500 medals under one-time special order follow:

Revenues (6,500  $150) + (2,500  $100) $1,225,000

Direct materials (6,500  $351) + (2,500  $351) 315,000

Direct manufacturing labor (6,500  $402) +(2,500  $402) 360,000

Batch manufacturing costs (1303  $500) + (25  $500) 77,500

Fixed manufacturing

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