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ACCOUNTING The Scottie Sweater Company produces sweaters under the "Scottie" label. The company buys raw wool and processes it into wool yam from which the sweaters are woven. One spindle of wool yam is required to produce one sweater. The costs and revenues associated with the sweaters are given below: $$ \begin{matrix} \text{ } & \text{Per Sweater}\\ \text{Selling price} & \text{\$ 30.00}\\ \text{Cost of manufacture:}\\ \text{Raw materials:}\\ \text{Buttons, thread, lining} & \text{\$ 2.00}\\ \text{Wool yarn} & \text{16.00}\\ \text{Total raw materials} & \text{18.00}\\ \text{Direct labor} & \text{5.80}\\ \text{Manufacturing overhead} & \text{8.70} & \text{32.50}\\ \text{Manufacturing profit (loss)} & \text{ } & \text{\$ (2.50)}\\ \end{matrix} $$ Originally, all of the wool yam was used to produce sweaters, but in recent years a market has developed for the wool yam itself. The yam is purchased by other companies for use in production of wool blankets and other wool products. Since the development of the market for the wool yarn, a continuing dispute has existed in the Scottie Sweater Company as to whether the yarn should be sold simply as yarn or processing into sweaters. Current cost and revenue data on the yarn are given below: $$ \begin{matrix} \text{ } & \text{Per Spindle of Yarn}\\ \text{Selling price} & \text{ } & \text{\$ 20.00}\\ \text{Cost of manufacture:} & \text{ } & \text{ }\\ \text{Raw materials (raw wool)} & \text{\$ 7.00}\\ \text{Direct labor} & \text{3.60}\\ \text{Manufacturing overhead} & \text{5.40} & \text{16.00}\\ \text{Manufacturing profit} & \text{ } & \text{\$ 4.00}\\ \end{matrix} $$ The market for sweaters is temporarily depressed, due to unusually warm weather in the western states where the sweaters are sold. This has made it necessary for the company to discount the selling price of the sweaters to $30 from the normal$40 price. Since the market for wool yam has remained strong, the dispute has again surfaced over whether the yam should be sold outright rather than processed into sweaters. The sales manager thinks that the production of sweaters should be discontinued: she is upset about having to sell sweaters at a $2.50 loss when the yam could be sold for a$4.00 profit. However, the production superintendent does not want to close down a large portion of the factory. He argues that the company is in the sweater business, not the yarn business, and that the company should focus on its core strength. All of the manufacturing overhead costs are fixed and would not be affected even if sweaters were discontinued. Manufacturing overhead is assigned to products on the basis of 150% of direct labor cost. Materials and direct labor costs are variable. 1. Would you recommend that the wool yam be sold outright or processed into sweaters? Support your answer with appropriate computations and explain your reasoning. 2. What is the lowest price that the company should accept for a sweater? Support your answer with appropriate computations and explain your reasoning. Verified answer
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ACCOUNTING Verified answer Other Quizlet setsRelated questionsWhat method of security classification guidance does an OCA?Step 6: Guidance
The primary method for OCAs is a security classification guide, or SCG. This is the preferred method issued for classification guidance. However, at times a properly marked source document may be used to disseminate classification guidance.
What section of the SCG identify specific information on what is to be classified?Identify the reason for classification. In order for information to be classified, it must meet the requirements of one or more of the categories of information listed in E.O. 13526, Sec. 1.4.
Who can be an original classification authority OCA )?OCA rollover: Original Classification Authority An individual authorized in writing, either by the President, the Vice-President, or by agency heads or other officials designated by the President, to originally classify information in the first instance.
Where is the classification authority block on classifying documents?Top Secret documents can be downgraded to Secret or Confidential, while Secret documents can be downgraded to Confidential. A document may not have any downgrading instructions, but if it does, they will be noted in the Classification Authority Block on the first page of the document.
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Where can you find the original classification authority OCA contact information in a security classification guide SCG )?
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