esc ! 1 Q A L ← Z Direct materials Direct labor Variable overhead Fixed overhead 2 An outside supplier has offered to sell Concord the subcomponent for $2.50 a unit. No fixed costs are avoidable. If Concord accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be O $(5650). O $5650. O $12850. O $(3600). Save for Later W S #3 $9000 X 13500 13000 19800 Q E D $ 4 R G Search or type URL FL % 5 T MacBook Pro C V < 60 G Y B & 7 H R U * Attempts: 0 of 1 used 8 N J O ( 1 9 K M Submit Answer ** ) O 0 V ► 49 I P дв CO

esc ! 1 Q A L ← Z Direct materials Direct labor Variable overhead Fixed overhead 2 An outside supplier has offered to sell Concord the subcomponent for $2.50 a unit. No fixed costs are avoidable. If Concord accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be O $(5650). O $5650. O $12850. O $(3600). Save for Later W S #3 $9000 X 13500 13000 19800 Q E D $ 4 R G Search or type URL FL % 5 T MacBook Pro C V < 60 G Y B & 7 H R U * Attempts: 0 of 1 used 8 N J O ( 1 9 K M Submit Answer ** ) O 0 V ► 49 I P дв CO

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Nelly Technology manufactures a particular computer component. Currently, the costs per unit are asfollows:Direct material P 50Direct labor 500Variable overhead 250Fixed overhead 400Fur Inc. has obtained Nelly with a offer to sell 10,000 units of the component for P1,100 per unit. IfNelly accepts the proposal, P2,500,000 of the fixed overhead will be eliminated. Should Nelly makeor buy the component?
Sheffield Corp. incurs the following costs to produce 9000 units of a subcomponent: Direct materials Direct labor Variable overhead Fixed overhead $9000 O $28950 O $(3500) $8950 O $(3250) 12500 12200 20000 An outside supplier has offered to sell Sheffield the subcomponent for $2.75 a unit. No fixed overhead costs are avoidable. If Sheffield accepts the offer, by how much will net income increase (decrease)?
Bramble Corp. incurs the following costs to produce 12000 units of a subcomponent: Direct materials $8400 Direct labor 12000 Variable overhead 12000 Fixed overhead 19000 An outside supplier has offered to sell Bramble the subcomponent for $2.15 a unit. No fixed costs are avoidable. If Bramble accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be O $(3600). $10200. O $(3000). O $3000.
Concord Corporation can produce 100 units of a necessary component part with the following costs: Direct Materials $23000 Direct Labor 9000 Variable Overhead Fixed Overhead 25000 O $50000 O $57000 O $62000 O $64000 12000 If Concord Corporation purchases the component externally, $5000 of the fixed costs can be avoided. Below what external price for the 100 units would Concord choose to buy instead of make the units?
Swifty's Manufacturing Company can make 100 units of a necessary component part with the following costs: Direct Materials Direct Labor Variable Overhead Fixed Overhead $117000 22000 49000 30000 If Swifty's Manufacturing Company purchases the component externally, $20000 of the fixed costs can be avoided. What is the maximum amount Swifty is willing to pay to purchase the 100 units? $218000 O $188000 $198000 $208000
Swifty Corporation can produce 100 units of a necessary component part with the following costs: Direct Materials $24000 Direct Labor 13000 Variable Overhead 30000 Fixed Overhead 12000 If Swifty Corporation purchases the component externally, $3500 of the fixed costs can be avoided. Below what external price for the 100 units would Swifty choose to buy instead of make the units? $70500 $75500 $58500 $67000
Sheffield Corp. incurs the following costs to produce 10500 units of a subcomponent: Direct materials Direct labor Variable overhead Fixed overhead $(3600). $9200 Ⓒ$8150. $950. $(950). 11750 13000 An outside supplier has offered to sell Sheffield the subcomponent for $2.80 a unit. No fixed costs are avoidable. If Sheffield accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be 20800
Harmony is currently producing 100 units of a necessary component part by incurring $60,000 in direct materials, $12,500 in direct labour, $22,500 in variable overhead, and $15,000 in fixed overhead. If Harmony purchases the component externally, $10,000 of fixed costs can be avoided. What is the external price where the company is indifferent between buying and selling? $950 $1,050 O $1,000 O $1,100 Save for Later Submit Answer
Coronado's Manufacturing Company can make 100 units of a necessary component part with the following costs: Direct Materials $113000 Direct Labor 18000 Variable Overhead Fixed Overhead 41000 $202000 $182000 O $192000 $172000 30000 If Coronado's Manufacturing Company purchases the component externally, $20000 of the fixed costs can be avoided. What is the maximum amount Coronado is willing to pay to purchase the 100 units?
Red Company produces 1,000 units of a necessary component with the following costs: Direct Materials $34,000 Direct Labor 15,000 Variable Overhead 8,000 Fixed Overhead 10,000 Red's Company could avoid $6,000 in fixed overhead costs if it acquires the components externally. If cost minimization is the major consideration and the company would prefer to buy the components, what is the maximum external price that Red Company would accept to acquire the 1,000 units externally? Select one: a. $59,000 b. $63,000 c. $61,000 d. $57,000
Sheffield Industries can produce 600 units of a necessary component part with the following costs: Direct Materials $75900 Direct Labour 20700 Variable Overhead 60300 Fixed Overhead 9700 If Sheffield Industries purchases the component externally, $2800 of the fixed costs can be avoided. Below what minimum external price for the 600 units would Sheffield choose to buy instead of make? $156900 $96600 $159700 $166600
Oriole Company incurs the following costs to produce 10200 units of a subcomponent: Direct materials $8568 Direct labor 11526 Variable overhead 12852 Fixed overhead 16200 An outside supplier has offered to sell Oriole the subcomponent for $2.85 a unit. No fixed overhead costs are avoidable.If Oriole accepts the offer, it could use the production capacity to produce another product that would generate additional income of $3600. The increase (decrease) in net income from accepting the offer would be $(276). $7476. $276. $(3600).