(b) Al Khoud Company is producing Motorcycle parts and is currently in the process of evaluating a specific part named Khoud-11 which cost information is given below. Development costs Selling Price (Local) Ratio of Sales between Muscat & Dubai Monthly Production Cycle Parts produced per cycle Indirect manufacturing costs per cycle OMR41,000 Production Period OMR15.50 Markets 1:2 1 16,000 units Direct production costs per cycle OMR28,600 Delivery charges per cycle 2 years Muscat & Dubai 1:1 OMR10,200 OMR36,500 OMR15,500 Ratio of Sales to Production Setup costs per cycle Assuming that the selling price for Khoud-11 in Muscat is 50% of that in Dubai, calculate both, the estimated life-cycle revenues for the full production period and the life-cycle operating income for the first year only.

(b) Al Khoud Company is producing Motorcycle parts and is currently in the process of evaluating a specific part named Khoud-11 which cost information is given below. Development costs Selling Price (Local) Ratio of Sales between Muscat & Dubai Monthly Production Cycle Parts produced per cycle Indirect manufacturing costs per cycle OMR41,000 Production Period OMR15.50 Markets 1:2 1 16,000 units Direct production costs per cycle OMR28,600 Delivery charges per cycle 2 years Muscat & Dubai 1:1 OMR10,200 OMR36,500 OMR15,500 Ratio of Sales to Production Setup costs per cycle Assuming that the selling price for Khoud-11 in Muscat is 50% of that in Dubai, calculate both, the estimated life-cycle revenues for the full production period and the life-cycle operating income for the first year only.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 16E

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(b) Al Khoud Company is producing Motorcycle parts and is currently in the process of evaluating a specific part named Khoud-11 which cost information is given below. Development costs Selling Price (Local) Ratio of Sales between Muscat & Dubai OMR24,000 OMR51 1:2 3 years Muscat & Dubai Production Period Markets Ratio of Sales to Production 1:1 Monthly Production Cycle Parts produced per cycle Indirect manufacturing costs per cycle Setup costs per cycle Direct production costs per cycle OMR26,000 | Delivery charges per cycle OMR12,800 OMR38,000 OMR16,500 1 17,000 units Assuming that the selling price for Khoud-11 in Muscat is 50% of that in Dubai, calculate both, the estimated life-cycle revenues for the full production period and the life-cycle operating income for the first year only.
Q.11) Pak Cables SAOG makes four components P, Q, R and S for which costs in the forthcoming year are expected to be as follows: Product (code name) Production (Units) Unit Margin Costs: Direct Materials Direct Labour Variable production overheads P R S 2,000 4,000 8,000 6,000 Omani Rial Omani Rial Omani Rial Omani Rial 08 10 04 08 16 18 08 12 04 06 02 04 28 34 14 24 Directly attributable fixed costs per annum and committed fixed costs: Incurred as direct consequence of making P Incurred as direct consequence of making Q Incurred as direct consequence of making R Incurred as direct consequence of making S Other fixed costs (committed) Omani Rial 2,000 10,000 12,000 16,000 60,000 100,000 Directly attributable fixed costs are all items of cash expenditures that are incurred as a direct the product in house. A sub contractor has offered to supply units of P, Q, R and S for Omani Rial 24, Omani Rial 42, Omani 28 respectively. Required: A. Which of the components Pak Cables SAOG should make…
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Hightech Sdn Bhd (HSB) produces knee guards for recreational activity, which are marketed throughout Malaysia. Selected cost and operating data relating to the product for two years are given below: Year 2020 Year 2021 Units in beginning inventory 0 ? Units produced during the year 18,000 10,800 Units sold during the year 14,400 14,400 Units in ending inventory 3,600 0 RM Selling price per unit 54 Manufacturing costs: Variable per unit produced: Direct materials 11 Direct labour 6 Variable overhead 5 Fixed per year 162,000 Selling and…
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