Description critical thinking assignmentplease avoid plagiarismall needed information are included in attached file 1 attachmentsSlide 1 of 1attachment_1attachment_1.slider-slide > img { width: 100%; display: block; } .slider-slide > img:focus { margin: auto; } Unformatted Attachment Preview CRITICAL THINKING ASSIGNMENT (120 points): Differential Analysis There are four problems for this module’s Critical Thinking Assignment. Complete the following questions using Microsoft Excel. No other submission format is allowed. Review the grading rubric to confirm you are meeting the assignment requirements. (All amounts in SAR unless otherwise indicated.) Problem 1 Kassel Corporation is considering trading a truck with a book value of SAR 80,000 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. Required: Prepare a differential analysis on whether to continue with the old machine (Alternative 1) or purchase the new machine (Alternative 2). 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 5,600,000 Cost of goods sold 3,800,000 Gross profit 1,800,000 Operating expenses 1,950,000 Loss from operations (150,000) It is estimated that 15% of the cost of goods sold represents fixed factory overhead costs, and that 20% of the operating expenses are fixed. Because Almond Cookies is only one of the many products, the fixed costs will not be materially affected if the product is discontinued. Required: Prepare a differential analysis to determine whether Baseball Equipment should be continued (Alternative 1) or discontinued (Alternative 2). Should Baseball Equipment be retained? Explain and indicate the dollar difference in favor or against. Problem 3 Marburg Manufacturing produces various-sized plastic panels for its main product. The manufacturing cost for small bottles is SAR 210 per unit, including fixed costs of SAR 65 per unit. A proposal is offered to purchase plastic panels from an outside source for SAR 185 per unit, plus SAR 7 per unit for freight. Required: 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. Problem 4 Whole milk is produced for SAR 18 per gallon. Whole milk can be sold without additional processing for SAR 25 per gallon or processed further into ice cream at an additional cost of SAR 9 per gallon. Ice cream can be sold for SAR 32 per gallon. Required: Prepare a differential analysis on whether to sell whole milk (Alternative 1), or process further into ice cream (Alternative 2). You must show all your work for credit. Purchase answer to see full attachment Tags: differential analysis operating expenses Operating costs manufacturing cost Net cashflow User generated content is uploaded by users for the purposes of learning and should be used following Studypool’s honor code & terms of service.

Description

critical thinking assignmentplease avoid plagiarismall needed information are included in attached file

1 attachmentsSlide 1 of 1attachment_1attachment_1.slider-slide > img { width: 100%; display: block; }
.slider-slide > img:focus { margin: auto; }

Unformatted Attachment Preview

CRITICAL THINKING ASSIGNMENT (120 points): Differential Analysis
There are four problems for this module’s Critical Thinking Assignment.
Complete the following questions using Microsoft Excel. No other submission format is
allowed. Review the grading rubric to confirm you are meeting the assignment
requirements. (All amounts in SAR unless otherwise indicated.)
Problem 1
Kassel Corporation is considering trading a truck with a book value of SAR 80,000 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.
Required:
Prepare a differential analysis on whether to continue with the old machine (Alternative
1) or purchase the new machine (Alternative 2).
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
5,600,000
Cost of goods sold
3,800,000
Gross profit
1,800,000
Operating expenses 1,950,000
Loss from operations (150,000)
It is estimated that 15% of the cost of goods sold represents fixed factory overhead
costs, and that 20% of the operating expenses are fixed. Because Almond Cookies is
only one of the many products, the fixed costs will not be materially affected if the
product is discontinued.
Required:
Prepare a differential analysis to determine whether Baseball Equipment should be
continued (Alternative 1) or discontinued (Alternative 2). Should Baseball Equipment be
retained? Explain and indicate the dollar difference in favor or against.
Problem 3
Marburg Manufacturing produces various-sized plastic panels for its main product. The
manufacturing cost for small bottles is SAR 210 per unit, including fixed costs of SAR 65
per unit. A proposal is offered to purchase plastic panels from an outside source for
SAR 185 per unit, plus SAR 7 per unit for freight.
Required:
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.
Problem 4
Whole milk is produced for SAR 18 per gallon. Whole milk can be sold without
additional processing for SAR 25 per gallon or processed further into ice cream at an
additional cost of SAR 9 per gallon. Ice cream can be sold for SAR 32 per gallon.
Required:
Prepare a differential analysis on whether to sell whole milk (Alternative 1), or process
further into ice cream (Alternative 2).
You must show all your work for credit.

Purchase answer to see full
attachment

Tags:
differential analysis

operating expenses

Operating costs

manufacturing cost

Net cashflow

User generated content is uploaded by users for the purposes of learning and should be used following Studypool’s honor code & terms of service.