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Question: carlos cavalas the manager of echo products brazilian division is...

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Carlos Cavalas, the manager of Echo Products Brazilian Division, is trying to set the production schedule for the last quarter of the year. The Brazilian Diviion had planned to sell 69,630 units during the year, but by September 30 only the following activity had been reported 8 points Units Inventory, January 1 Production Sales Inventory, September 30 72,500 63,300 9,200 eBook The division can rent warehouse space to store up to 29,400 units. The minimum inventory level that the division should carry is 2,900 units. Mr. Cavalas is aware that production must be at least 5,520 units per quarter in order to retain a nucleus of key employees Maximum production capacity is 45,200 units per quarter Print has been soft, and the sales forecast for the last quarter is only 20,100 units. Due to the nature of the divisions operations, Referencesfixed manufacturing overhead is a major element of product cost. Required 1a. Assume that the division is using variable costing. How many units should be scheduled for production during the last quarter of the year? 1b. Will the number of units scheduled for production affect the divisions reported income or loss for the year? 2. Assume that the division is using absorption costing and that the divisional manager is given an annual bonus based on divisional operating income. If Mr. Cavalas wants to maximize his divisions operating income for the year, how many units should be scheduled for production during the last quarter?

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