Required: Prepare sales and production budgets.
Q2. ABC Company has equipment and it considers whether to sell it directly at a price of SR 200,000 or to make some modifications costing SR 10,000 to sell it at a price of SR 220,000. Required: using the differential analysis which alternative do you recommend about the equipment.
Q3.ABC Inc. has average operating assets of SR200, 000 and is required to earn a return of 15% on these assets. In the current period, the division earns net income of SR50, 000.
Required: compute the residual income.
Q4. At ABC Inc., manufacturing overhead is applied to units of product based on direct labor-hours. The estimated direct labor hour next year is 50,000 hours; the variable manufacturing overhead rate is SR 20 per direct labor-hour. Fixed manufacturing overhead is SR 500,000 per year
Required: compute the single predetermined manufacturing overhead rate.