accounting homework

During August, the factory worked only 780 direct labor-hours and produced 2,700 sets of covers. The following actual costs were recorded during the month:

  Direct materials

(8,910 yards)

$6

2,370

$23.10

$8,112

3.00

$3,120

1.16

27.26

At standard, each set of covers should require 3 yards of material. All of the materials purchased during the month were used in production.

Requirement 1:

Compute the direct materials price and quantity variances for August (Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Input all amounts as positive values. Round your answers to the nearest dollar amount. Omit the “$” sign in your response.):

  Materials price variance

$ 

 $

  (Click to select)Favorable

None

Unfavorable

  Materials quantity variance

$

$  

(Click to select)NoneFU

Requirement 2:

Compute the direct labor rate and efficiency variances for August (Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Input all amounts as positive values. Round your answers to the nearest dollar amount. Omit the “$” sign in your response.):

  Labor rate variance

$ $

(Click to select)UNoneF

  Labor efficiency variance

  (Click to select)Favorable

None
Unfavorable

Requirement 3:

Compute the variable overhead rate and efficiency variances for August(Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Input all amounts as positive values. Omit the “$” sign in your response.):

  Variable overhead rate variance

  (Click to select)None Unfavorable

Favorable

  Variable overhead efficiency variance

Erie

Company

manufactures a small CD player called the Jogging Mate. The company uses standards to control its costs. The labor standards that have been set for one Jogging Mate CD player are as follows:

(b)

By how much does this differ from the cost that was incurred? (Indicate the effect of the variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Input all amounts as positive values. Omit the “$” sign in your response.)

  Total

variance

$  

(Click to select)NoneUF

Break down the difference in cost from Requirement 1 above into a labor rate variance and a labor efficiency variance. (Indicate the effect of the variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Input all amounts as positive values. Omit the “$” sign in your response.)

(Click to select)FUNone  

(Click to select)UNoneF  

The budgeted variable manufacturing overhead rate is $4.5 per direct labor-hour. During August, the company incurred $44,148 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month. (Indicate the effect of the variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Input all amounts as positive values. Omit the “$” sign in your response.)

  Variable Overhead Rate Variance

  Variable Overhead Efficiency Variance

Huron Company produces a commercial cleaning compound known as Zoom. The direct materials and direct labor standards for one unit of Zoom are given below:

During the most recent month, the following activity was recorded:

a.

20,650 pounds of material were purchased at a cost of $

2.7

per pound.

b.

All of the material purchased was used to produce 2,500 units of Zoom.

670 hours of direct labor time were recorded at a total labor cost of $7,638.

Compute the direct materials price and quantity variances for the month. (Indicate the effect of the variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance).Input all amounts as positive values. Omit the “$” sign in your response.)

Compute the direct labor rate and efficiency variances for the month. (Indicate the effect of the variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance).Input all amounts as positive values. Omit the “$” sign in your response.)

Dawson Toys, Ltd., produces a toy called the Maze. The company has recently established a standard cost system to help control costs and has established the following standards for the Maze toy:

Direct materials:

7 microns per toy at $0.3 per micron

Direct labor:

1.4 hours per toy at $6.8 per hour

During July, the company produced 4,900 Maze toys.

Product

ion data for the month on the toy follow:

71,000 microns were purchased at a cost of $0.27 per micron. 28,125 of these microns were still in inventory at the end of the month.

7,160 direct labor-hours were worked at a cost of $50,836.

Compute the direct materials price and quantity variances for July. (Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Input all amounts as positive values. Round your answers to the nearest dollar amount. Omit the “$” sign in your response.)

  Material price variance

  Material quantity variance

(Click to select)UFNone

Victoria Chocolates, Ltd., makes premium handcrafted chocolate confections in London. The owner of the company is setting up a standard cost system and has collected the following data for one of the company’s products, the Empire Truffle. This product is made with the finest white chocolate and various fillings. The data below pertain only to the white chocolate used in the product (the currency is stated in pounds denoted here as £):

  Material requirements, kilograms of white chocolate per dozen truffles

0.86

kilograms  

  Allowance for waste, kilograms of white chocolate per dozen truffles

0.03

  Allowance for rejects, kilograms of white chocolate per dozen truffles

0.02

  Purchase price, finest grade white chocolate

£10

 per kilogram  

  Purchase discount

3

%

 of purchase price  

  Shipping cost from the supplier in Belgium

£0.25

  Receiving and handling cost

£0.1

5

Determine the standard price of a kilogram of white chocolate. (Round your answer to 2 decimal places. Omit the “£” sign in your response.)

  Standard price

£  

Determine the standard quantity of white chocolate for a dozen truffles. (Round your answer to 2 decimal places.)

  Standard quantity

Determine the standard cost of the white chocolate in a dozen truffles. (Round your answer to 2 decimal places. Omit the “£” sign in your response.)

  Standard cost

Management of Mittel Rhein AG of Köln, Germany, would like to reduce the amount of time between when a customer places an order and when the order is shipped. For the first quarter of operations during the current year the following data were reported:

  Inspection time

0.5

 days  

  Wait time (from order to start of production)

16.7

  Process time

  Move time

1.5

  Queue time

4.3

Compute the throughput time. (Round your answer to 1 decimal place.)

  Throughput time

Compute the manufacturing cycle efficiency (MCE) for the quarter. (Round your answer to 2 decimal places.)

  Manufacturing cycle efficiency

What percentage of the throughput time was spent in non-value-added activities? (Round your answer to the nearest whole number. Omit the “%” sign in your response.)

%  

Requirement 4:

Compute the delivery cycle time.(Round your answer to 1 decimal place.)

  Delivery cycle time

Requirement 5:

If by using Lean Production all queue time during production is eliminated, what will be the new MCE? (Round your answer to 3 decimal places.)

Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. When a client receives an order from a customer, the order is forwarded to Logistics Solutions, which pulls the item from storage, packs it, and ships it to the customer. The company uses a predetermined variable overhead rate based on direct labor-hours.

     In the most recent month, 200,000 items were shipped to customers using 9,900 direct labor hours. The company incurred a total of $30,195 in variable overhead costs.

     According to the company’s standards, 0.05 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.1 per direct labor−hour.

What variable overhead cost should have been incurred to fill the orders for the 200,000 items? (Omit the “$” sign in your response.)

  Variable overhead cost

How much does this differ from the actual variable overhead cost? (Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Input all amounts as positive values. Omit the “$” sign in your response.)

  Total variable overhead variance

 (Click to select)FUNone  

(C

Break down the difference computed in Requirement 1 above into a variable overhead rate variance and a variable overhead efficiency variance. (Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Input all amounts as positive values. Omit the “$” sign in your response.)

(Click to select)UNoneF  

(Click to select)NoneUF  

SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the company’s products is grilled salmon in dill sauce with baby new potatoes and spring vegetables. During the most recent week, the company prepared 7,000 of these meals using 1,430 direct labor-hours. The company paid these direct labor workers a total of $14,658 for this work, or $10.25 per hour.

According to the standard cost card for this meal, it should require 0.21 direct labor-hours at a cost of $10 per hour.

What direct labor cost should have been incurred to prepare 7,000 meals? (Omit the “$” sign in your response)

  Direct labor cost

How much does this differ from the actual direct labor cost? (Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Input all amounts as positive values. Omit the “$” sign in your response.)

  Total direct labor variance

(C

Break down the difference computed in Requirement 1 above into a labor rate variance and a labor efficiency variance. (Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Input all amounts as positive values. Omit the “$” sign in your response.)

(Click to select)UFNone  

Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 37,000 helmets, using 22,940 kilograms of plastic. The plastic cost the company

RM

197,284. (The currency in Malaysia is the ringgit, which is denoted here by RM.)

    According to the standard cost card, each helmet should require 0.54 kilograms of plastic, at a cost of RM9 per kilogram.

What cost for plastic should have been incurred to make 37,000 helmets? (Omit the “RM” sign in your response.)

  Cost incurred

RM     

How much greater or less is this than the cost that was incurred? (Omit the “RM” sign in your response.)

  Standard cost is (Click to select)greaterless by RM   than the actual cost incurred.  

Break down the difference computed in Requirement 1 above into a materials price variance and a materials quantity variance. (Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Input all amounts as positive values. Omit the “RM” sign in your response.)

 RM

 (Click to select)UFNone  

  (Click to select)UNoneF  

Companhia Bradesco, S.A., of Brazil, an industrial supply store chain, has two divisions. The company’s contribution format income statement segmented by divisions for last year is given below (the currency in Brazil is the real, denoted here by R):

Division

Total Company

Plastics

Glass

  Sales

R3,499,900    

R2,001,000    

R1,498,900    

  Variable expenses

1,714,051

960,480

753,571

  Contribution margin

1,785,849

1,040,520

745,329

  Traceable fixed expenses

:

  Advertising

609,200

297,000

312,200

      Depreciation

226,300

113,000

113,300

      Administration

434,959

210,000

224,959

1,270,459

620,000

650,459

  Division segment margin

515,390

R420,520    

R94,870    

  Common fixed expenses

387,000

  Net operating income

R128,390    

    Top management doesn’t understand why the Glass Division has such a low segment margin when its sales are only 25 less than sales in the Plastics Division. Accordingly, management has directed that the Glass Division be further segmented into product lines. The following information is available on the product lines in the Glass Division:

Glass Division

Product Line

s

Flat Glass

Auto Glass

Specialty Glass

R503,000    

701,900

294,000

R80,400    

R112,400    

R119,400    

R24,900    

R55,700    

R32,700    

R29,600    

R35,100    

R41,700    

  Variable expenses as a percentage of sales

6

5%

39%

52%

Analysis shows that R118,559 of the Glass Division’s administration expenses are common to the product lines.

Prepare a contribution format segmented income statement for the Glass Division with segments defined as product lines. (Negative amounts other than the expenses should be indicated by a minus sign. Omit the “R” sign in your response.)

Glass

Division

R  

  Product line segment margin

  Divisional segment margin

Management is surprised by Specialty Glass’s poor showing and would like to have the product line segmented by market. The following information is available about the two markets in which Specialty Glass is sold:

Specialty Glass

Market

s

Domestic

Foreign

R1

96,000

R98,000   

R39,600    

R79,800    

4

3%

70%

All of Specialty Glass’s depreciation and administration expenses are common to the markets in which the product is sold. Calculate the following for the Specialty Glass product line with segments defined as markets. (Negative amounts should be indicated by a minus sign. Omit the “R” sign in your response.)

  Domestic market segment margin

  Foreign market segment margin

Refer to the statement prepared in (Requirement 1) above. The sales manager wants to run a special promotional campaign on one of the product lines over the next month. A market study indicates that such a campaign would increase sales of Flat Glass by R200,000 or sales of Auto Glass by R146,000. The campaign would cost R29,000. Calculate the increased net operating income. (Omit the “R” sign in your response.)

Which product line should be chosen?

(Click to select)Auto Glass Flat Glass

Wingate Company, a wholesale distributor of videotapes, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement, which follows:

$1,520,000

544,600

975,400

  Fixed expenses

1,073,000

  Net operating income (loss)

-$97,600

In an effort to isolate the problem, the president has asked for an income statement segmented by division. Accordingly, the Accounting Department has developed the following information:

East

Central

West

$460,000

$600,000

  Variable expenses as a

      percentage of sales

21%

$107,000

$321,000

$208,000

Prepare a contribution format income statement segmented by divisions, as desired by the president. (Input all amount as positive value except divisional segment loss and net operating loss which should be indicated with a minus sign. Omit the “$” sign in your response.)

  Common fixed expenses not

     traceable to divisions

  Net operating (Click to select)incomeloss

As a result of a marketing study, the president believes that sales in the West Division could be increased by 14% if monthly advertising in that division were increased by $21,000. Compute the Incremental net operating income. (Negative amount should be indicated by a minus sign. Omit the “$” sign in your response.)

  Incremental net operating income

Would you recommend the increased advertising?

(Click to select)NoYes

Raner, Harris, & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices-one in

Chicago

and one in

Minneapolis

. The firm classifies the direct costs of consulting jobs as variable costs.

Assume that Minneapolis’ sales by major market are as follows:

Medical

Dental

$510,000

100%

$340,000

$170,000

306,000

60%

221,000

85,000

50%

204,000

40%

119,000

35%

61,200

12%

17,000

44,200

2

6%

  Market segment margin

142,800

2

8%

$102,000

30%

$40,800

24%

     not traceable to markets

15,300

Office

segment margin

$127,500

25%

The company would like to initiate an intensive advertising campaign in one of the two markets during the next month. The campaign would cost $6,800. Marketing studies indicate that such a campaign would increase sales in the Medical market by $59,500 or increase sales in the Dental market by $51,000.

Required:

Determine the increase in net operating income in each market if the advertising campaign were to be initiated in that market. (Omit the “$” sign in your response.)

  Increase in net operating income

$   

Raner, Harris, & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices—one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format income statement for the company’s most recent year is given below:

$1,050,000

$210,000

$840,000

567,000

54%

63,000

504,000

483,000

46%

147,000

3

36,000

235,200

22%

109,200

126,000

15%

247,800

$37,800

18%

      traceable to offices

168,000

16%

$79,800

By how much would the company’s net operating income increase if Minneapolis increased its sales by

$105,000

per year? Assume no change in cost behavior patterns. (Omit the “$” sign in your response.)

Refer to the original data. Assume that sales in Chicago increase by $70,000 next year and that sales in Minneapolis remain unchanged. Assume no change in fixed costs. Prepare a new segmented income statement for the company. (Round your percentage amounts to 2 decimal places. Input all amount as positive value. Omit the “$” and “%” signs in your response.)

Segments

Amount

     not traceable to segments

Selected sales and operating data for three divisions of different structural engineering firms are given as follows:

Division A

Division B

Division C

$5,100,000

$9,000,000

$8,600,000

  Average operating assets

$1,590,000

$5,900,000

$1,500,000

$305,000

$896,000

$330,000

  Minimum required rate of return

20%

23%

Compute the return on investment (

ROI

) for each division using the formula stated in terms of margin and turnover. (Round all calculations to 2 decimal places, e.g., .1234 as 12.34. Omit the “%” sign in your response.)

  Division A

  Division B

  Division C

Compute the residual income for each division. (Leave no cells blank, be certain to enter “0” wherever required. Negative amounts should be indicated by a minus sign. Omit the “$” sign in your response.)

  Residual income

Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below (the currency is the Australian dollar, denoted here as $):

Queensland

New South

Wales

$1,000,000

$1,750,000

$500,000

$90,000

  Property, plant, and equipment (net)

$250,000

$200,000

Compute the rate of return for each division using the return on investment (ROI) formula stated in terms of margin and turnover. (Round all calculations to 2 decimal places. Omit the “%” sign in your response.)

  ROI

  Queensland

%       

  New South Wales

Which divisional manager seems to be doing the better job?

Meiji Isetan Corp. of Japan has two regional divisions with headquarters in

Osaka

and

Yokohama

. Selected data on the two divisions follow (in millions of yen, denoted by ¥):

¥8,500,000

¥20,900,000

¥920,000

¥2,570,000

¥2,800,000

¥8,300,000

For each division, compute the return on investment (ROI) in terms of margin and turnover. (Round your answers to 2 decimal places. Omit the “%” sign in your response.)

   Osaka

  Yokohama

  Return on investment

Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 20%. Compute the residual income for each division. (Omit the “¥” sign in your response.)

      Yokohama

¥  

¥    

Is Yokohama’s greater amount of residual income an indication that it is better managed?

Royal Lawncare Company produces and sells two packaged products,

Weedban

and

Greengrow

. Revenue and cost information relating to the products follow:

  Selling price per unit

$10.00

$33.00

  Variable expenses per unit

$3.00

$14.00

  Traceable fixed expenses per year

$128,000

$49,000

Common fixed expenses in the company total $111,000 annually. Last year the company produced and sold 38,500 units of Weedban and 21,000 units of Greengrow.

Prepare a contribution format income statement for the year segmented by product lines. (Input all amount as positive value. Omit the “$” sign in your response.)

    traceable to products

Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 43,000 helmets, using 24,940 kilograms of plastic. The plastic cost the company RM189,544. (The currency in Malaysia is the ringgit, which is denoted here by RM.)

    According to the standard cost card, each helmet should require 0.5 kilograms of plastic, at a cost of RM8 per kilogram.

What cost for plastic should have been incurred to make 43,000 helmets? (Omit the “RM” sign in your response.)

  Standard cost is (Click to select)lessgreater by RM   than the actual cost incurred.  

 (Click to select)NoneFU  

SkyChefs, Inc., prepares in-flight meals for a number of major airlines. One of the company’s products is grilled salmon in dill sauce with baby new potatoes and spring vegetables. During the most recent week, the company prepared 14,000 of these meals using 3,460 direct labor-hours. The company paid these direct labor workers a total of $33,043 for this work, or $9.55 per hour.

According to the standard cost card for this meal, it should require 0.25 direct labor-hours at a cost of $9.3 per hour.

What direct labor cost should have been incurred to prepare 14,000 meals? (Omit the “$” sign in your response)

(Click to select)FNoneU  

     In the most recent month, 170,000 items were shipped to customers using 6,700 direct labor hours. The company incurred a total of $23,115 in variable overhead costs.

     According to the company’s standards, 0.04 direct labor-hours are required to fulfill an order for one item and the variable overhead rate is $3.5 per direct labor−hour.

What variable overhead cost should have been incurred to fill the orders for the 170,000 items? (Omit the “$” sign in your response.)

 (Click to select)FNoneU  

0.4

15.8

3.9

0.74

0.01

£9

£0.45

          Direct materials: 6 microns per toy at $0.33 per micron

          Direct labor: 1.5 hours per toy at $6.9 per hour

During July, the company produced 4,600 Maze toys. Production data for the month on the toy follow:

73,000 microns were purchased at a cost of $0.29 per micron. 38,500 of these microns were still in inventory at the end of the month.

7,300 direct labor-hours were worked at a cost of $52,560.

         $3  per pound

$22.5

        0.3  hours

       $10.4  per hour

$3.12

21,100 pounds of material were purchased at a cost of $2.9 per pound.

All of the material purchased was used to produce 2,600 units of Zoom.

700 hours of direct labor time were recorded at a total labor cost of $8,610.

    30 minutes

$5.4

$2.7

During August, 10,220 hours of direct labor time were needed to make 19,400 units of the Jogging Mate. The direct labor cost totaled $53,144 for the month.

What direct labor cost should have been incurred to make 19,400 units of the Jogging Mate? (Omit the “$” sign in your response.)

(Click to select)UFNone  

(Click to select)NoneFU  

The budgeted variable manufacturing overhead rate is $4.5 per direct labor-hour. During August, the company incurred $51,100 in variable manufacturing overhead cost. Compute the variable overhead rate and efficiency variances for the month. (Indicate the effect of the variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Input all amounts as positive values. Omit the “$” sign in your response.)

(Click to select)FNoneU  

Marvel Parts, Inc., manufactures auto accessories. One of the company’s products is a set of seat covers that can be adjusted to fit nearly any small car. The company has a standard cost system in use for all of its products. According to the standards that have been set for the seat covers, the factory should work 780 hours each month to produce 1,950 sets of covers. The standard costs associated with this level of production are:

$38,610

$19.80

$6,942

3.56

$2,340

1.20

$24.56

During August, the factory worked only 790 direct labor-hours and produced 2,100 sets of covers. The following actual costs were recorded during the month:

  Direct materials (6,510 yards)

$39,060

$18.60

$7,900

3.76

$4,740

2.26

24.62

  (Click to select)FNoneU

  (Click to select)NoneUF

$8.00

$35.00

$2.90

$135,000

$50,000

Common fixed expenses in the company total $96,000 annually. Last year the company produced and sold 43,500 units of Weedban and 22,500 units of Greengrow.

¥9,500,000

¥19,600,000

¥930,000

¥2,670,000

¥9,400,000

Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is

13%

. Compute the residual income for each division. (Omit the “¥” sign in your response.)

$1,350,000

$750,000

$60,000

$148,500

$260,000

$220,000

$6,100,000

$10,600,000

$8,500,000

$5,000,000

$2,300,000

$291,000

$894,000

$

276,000

10%

$120,000

$480,000

324,000

288,000

84,000

192,000

134,400

62,400

72,000

141,600

$21,600

$45,600

By how much would the company’s net operating income increase if Minneapolis increased its sales by $60,000 per year? Assume no change in cost behavior patterns. (Omit the “$” sign in your response.)

Refer to the original data. Assume that sales in Chicago increase by $40,000 next year and that sales in Minneapolis remain unchanged. Assume no change in fixed costs. Prepare a new segmented income statement for the company. (Round your percentage amounts to 2 decimal places. Input all amount as positive value. Omit the “$” and “%” signs in your response.)

$690,000

$230,000

414,000

299,000

115,000

161,000

82,800

23,000

59,800

193,200

$138,000

$55,200

20,700

$172,500

The company would like to initiate an intensive advertising campaign in one of the two markets during the next month. The campaign would cost $9,200. Marketing studies indicate that such a campaign would increase sales in the Medical market by $80,500 or increase sales in the Dental market by $69,000.

$1,340,000

513,200

826,800

909,000

-$82,200

$310,000

$570,000

48%

47%

$108,000

$327,000

  Net operating (Click to select)lossincome

As a result of a marketing study, the president believes that sales in the West Division could be increased by 16% if monthly advertising in that division were increased by $25,000. Compute the Incremental net operating income. (Negative amount should be indicated by a minus sign. Omit the “$” sign in your response.)

R3,502,600    

R1,998,000    

R1,504,600    

1,734,336

959,040

775,296

1,768,264

1,038,960

729,304

607,800

296,000

311,800

233,000

118,000

419,864

209,864

1,260,664

624,000

636,664

507,600

R414,960    

R92,640    

386,000

R121,600    

R499,000    

699,600

R80,300    

R112,100    

R25,300    

R56,200    

R33,500    

R30,100    

R34,600    

66%

41%

Analysis shows that R103,464 of the Glass Division’s administration expenses are common to the product lines.

R204,000    

R102,000   

R39,700    

R79,700    

Refer to the statement prepared in (Requirement 1) above. The sales manager wants to run a special promotional campaign on one of the product lines over the next month. A market study indicates that such a campaign would increase sales of Flat Glass by R199,000 or sales of Auto Glass by R147,000. The campaign would cost R30,000. Calculate the increased net operating income. (Omit the “R” sign in your response.)

(Click to select)Auto GlassFlat Glass