ACC202 Management Accounting Assignment

Added on - Sep 2019

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ACC202 MANAGEMENT ACCOUNTING GROUP ASSIGNMENT Due Week 10Assignment topic:Parker Ltd produce quality pens and pencils and it has been producing and selling 10,000 setsper month . It provides the following information because it has been facing increasing competitionboth in the local market and from imported products:Manufacturing costsDirect material $1.00 per unitDirect labour 1.20 per unitVariable overhead 0.80 per unitFixed overhead $10,000Marketing costsVariable $1.50 per unitFixed $15,000Parker has been selling these pen and pencil sets for $7.50 each and has asked you to provideanswers to the following. Each part is to be considered independently of the others.Required:(a) Assuming that all 10,000 pen and pencil sets produced in a month are sold calculate the monthlyprofit .(b) A request has come from an educational institution for Parker to supply an extra 2,000 pens permonth at a price of $5.50 per set. The educational institution wants their logo inscribed on the penand pencil set. This would cost an extra $0.60 per set. Should this one off request be accepted basedon profit alone? Should any other factors be considered before accepting the order? What otherfactors should be considered?(c) Another request has come in the form of a long term government contract which wants you tosupply 5,000 pen and pencil sets per month on an ongoing basis for $4 per set and a one offpayment of $4,000.Should this offer be accepted? Provide reasons for your decision.(d)Parker is trying to enter a foreign market .It believes it can sell an extra 10,000 pen and pencilsets in this market .If it produces this extra 10,000 sets it will be producing at maximum capacity.What is the minimum price it could enter this market in the short term? What is the minimum pricein the long term?
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