Description
Hello everyone
I kindly need your support with the following question, please, Thanks.
There are four problems for this Module’s CT Assignment.
Problem 1
Taper
Corporation is considering trading a truck with a book value of SAR
85,000 with an estimated five-year life for a new truck that would cost
SAR 200,000. The old truck could be sold for SAR 75,000. The new truck
has a seven-year life with no residual value. The new truck would reduce
annual operating costs by SAR 20,200 per year. Prepare a differential
analysis on whether to continue with the old machine (Alternative 1) or
purchase the new machine (Alternative 2). State your decision and the
SAR difference.
Problem 2
A
condensed income statement by product line for Brion Sporting Goods
indicated the following for Baseball Equipment for the past year: (All
amounts in SAR)
- Sales: 5,400,000
- Cost of goods sold: 3,700,000
- Gross profit: 1,700,000
- Operating expenses: 1,850,000
- Loss from operations: (150,000)
It is estimated that 15% of the cost of
goods sold represents fixed factory overhead costs, and 20% of the
operating expenses are fixed. Because Baseball Equipment is only one of
the many products, the fixed costs will not be materially affected if
the product is discontinued. Prepare a differential analysis to
determine whether Baseball Equipment should be continued (Alternative 1)
or discontinued (Alternative 2). State your decision and the SAR
difference.
Problem 3
Marburg
Manufacturing produces various-sized plastic panels for its main
product. The manufacturing cost for small bottles is SAR 200 per unit,
including fixed costs of SAR 65 per unit. A proposal is offered to
purchase plastic panels from an outside source for SAR 180 per unit,
plus SAR 6 per unit for freight. Prepare a differential analysis to
determine whether the company should make (Alternative 1) or buy
(Alternative 2) for bottles, assuming fixed costs are not affected by
the decision. State your decision and the SAR difference.
Problem 4
Whole
milk is produced for SAR 17 per gallon. Whole milk can be sold without
additional processing for SAR 24 per gallon or processed further into
ice cream at an additional cost of SAR 12 per gallon. Ice cream can be
sold for SAR 32 per gallon. Prepare a differential analysis on whether
to sell whole milk (Alternative 1), or process further into ice cream
(Alternative 2). State your decision and the SAR difference.
You must show all your work.
Regards
Abdul
