Ficher auto manufactures 15,350 components per year. The manufacturing cost of the components was determined to be as follows: Direct materials $ 152,000 Direct labor 250,000 Variable manufacturing overhead 91,000 Fixed manufacturing overhead 130,000 Total 623,000 Assume that the fixed manufacturing overhead reflects the cost of Ficher manufacturing facility. This facility cannot be used for any other purpose. An outside supplier has offered to sell the component to Ficher for $34. If Ficher purchases the component from the outside supplier, the effect on %24
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- The following product Costs are available for Haworth Company on the production of chairs: direct materials, $15,500; direct labor, $22.000; manufacturing overhead, $16.500; selling expenses, $6,900; and administrative expenses, $15,200. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 7,750 equivalent units are produced, what is the equivalent material cost per unit? If 22,000 equivalent units are produced, what is the equivalent conversion cost per unit?Hicks Contracting collects and analyzes cost data in order to track the cost of installing decks on new home construction jobs. The following are some of the costs that they incur. Classify these costs as fixed or variable costs and as product or period costs. Lumber used to construct decks ($12.00 per square foot) Carpenter labor used to construct decks ($10 per hour) Construction supervisor salary ($45,000 per year) Depreciation on tools and equipment ($6,000 per year) Selling and administrative expenses ($35,000 per year) Rent on corporate office space ($34,000 per year) Nails, glue, and other materials required to construct deck (varies per job)Roper Furniture manufactures office furniture and tracks cost data across their process. The following are some of the costs that they incur. Classify these costs as fixed or variable costs, and as product costs or period costs. Wood used to produce desks ($125,00 per desk) Production labor used to produce desks ($15 per hour) Production supervisor salary ($45,000 per year) Depreciation on factory equipment ($60,000 per year) Selling and administrative expenses ($45,000 per year) Rent on corporate office ($44,000 per year) Nails, glue, and other materials required to produce desks (varies per desk) Utilities expenses for production facility Sales staff commission (5% of gross sales)
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- Supler Corporation produces a part used in the manufacture of one of its products. The unit product cost is $22, computed as follows: Direct materials $ 7 Direct labor Variable manufacturing overhead Fixed manufacturing overhead 4 Unit product cost $22 An outside supplier has offered to provide the annual requirement of 4,800 of the parts for only $10 each. The company estimates that 75% of the fixed manufacturing overhead cost above could be eliminated if the parts are purchased from the outside supplier. Assume that direct labor is an avoidable cost in this decision. Based on these data, the financial advantage (disadvantage) of purchasing the parts from the outside supplier would be:Each year, Basu Company produces 14,000 units of a component used in microwave ovens. An outside supplier has offered to supply the part for $1.28. The unit cost is: Direct materials $0.83 Direct labor 0.33 Variable overhead 0.06 Fixed overhead 2.65 Total unit cost $3.87 Required: 1. What are the alternatives for Basu Company? 2. Assume that none of the fixed cost is avoidable. List the relevant cost(s) of internal production. List the relevant cost(s) of external purchase. 3. Which alternative is more cost effective and by how much? by $fill in the blank 5 4. What if $21,520 of fixed overhead is rental of equipment used only in production of the component that can be avoided if the component is purchased? Which alternative is more cost effective and by how much? by $fill in the blank 7The Grouper Company manufactures 1,478 units of a part that could be purchased from an outside supplier for $14 each. Grouper’s costs to manufacture each part are as follows: Direct materials $2 Direct labor 4 Variable manufacturing overhead 3 Fixed manufacturing overhead 8 Total $17 All fixed overhead is unavoidable and is allocated based on direct labor. The facilities that are used to manufacture the part have no alternative uses. (a) Calculate relevant cost to make. Relevent cost to make $ ___ per unit (c) Calculate net cost to buy if Grouper leases the manufacturing facilities to another company for $9,260 per year. Net cost to buy $ ______