Superior Manufacturing Essay examples

1603 Words Nov 27th, 2011 7 Pages
Superior Manufacturing Company

Q1. Based on the 2004 statement of profit and loss data (Exhibits 1 and 2), do you agree with Water’s decision to keep product 103?

Table 1: Product 103 Costs
|Product 103 Costs |
| |direct |indirect |
|Fixed | |16,039 |
|Variable |5,763 |7,181 |

If product 103 is terminated, there will be a greater loss since Superior has to continue to pay fixed costs. Fixed costs include Rent, Property Tax, Property Insurance, Indirect Labor, Light & Heat, Building Service, Selling Expense, SGA, Depreciation, Interest and Other Income. Loss of
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|
| |Standard |Actual |-=Unfavorable |
|Rent |2,919 |2,660 |259 |
|Property Taxes |839 |770 |69 |
|Property Insurance |793 |732 |61 |
|Compensation Insurance |919 |917 |2 |
|Direct Labor |13,751 |13,820 |-69 |
|Indirect Labor |4,698 |4,485 |213 |
|Power |435 |432 |3 |
|Light & Heat |205 |200 |5 |
|Building Service |147 |107 |40 |
|Materials |9,301 |9,282 |19 |
|Supplies |747 |750 |-3 |
|Repairs |236 |251 |-15 |
| Total

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