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BUS 615 Fall, 2013 Final Exam Answer any three (3) of the following questions. Submit your answer in an Excel file, with a separate, labelled tab for each question chosen. Format your spreadsheets so that they are easy to follow and calculations are readily apparent. Verbal answers should be concise and clearly stated. Each question counts 30 points. XYZ Corporation operates a Marketing Research department. This department compiles information from published sources, and from its own consumer studies, to assist marketing personnel in forecasting product demand and making pricing and promotion decisions. A large marketing research firm has bid $280,000 per year for a three-year contract to perform the same services. For the most recent year, XYZ’s controller determined the cost of operating the Marketing Research department to be $346,000: Salary and fringes: Senior researcher $68,000 Staff researcher 48,000 Clerical staff 70,000 VP Marketing (1) 62,000 Occupancy (2) 31,000 Subscriptions and travel (3) 67,000 Represents 30% of cost of the VP, who is estimated to spend 30% of his time on marketing research issues Occupancy costs are $31/sq ft: depreciation, $14; utilities, $11; maintenance, $6. Utilities are 70% variable; maintenance is an allocation of fixed costs. There are no plans for alternate use of the space. Subscriptions and travel costs would be borne by outside research firm. Required: Determine the cost differential to XYZ of outsourcing versus retaining this function. Discuss the factors that XYZ management should consider in making this decision. Lewiston, Inc. is a manufacturer with a calendar accounting year. A physical inventory is taken on January 1, and any items not in inventory are charged to cost of goods sold. a. In late March, Lewiston signed a $3,600,000 contract with Hawthorn, Inc. for production and installation of custom machinery at Hawthorn’s plant. On December 22, Lewiston shipped Hawthorn the…