he production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the pcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 23,000 Units to be produced 26,000 25,000 24,000 n addition, 34,500 grams of raw materials inventory is on hand at the start of the 1st Quarter and the beginning accounts payable for ne 1st Quarter is $8,400. ach unit requires 6 grams of raw material that costs $1.60 per gram. Management desires to end each quarter with an inventory of aw materials equal to 25% of the following quarter's production needs. The desired ending inventory for the 4th Quarter is 6,000 rams. Management plans to pay for 60% of raw material purchases in the quarter acquired and 40% in the following quarter. Each unit equires 0.20 direct labor-hours and direct laborers are paid $14.50 per hour.

he production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the pcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 23,000 Units to be produced 26,000 25,000 24,000 n addition, 34,500 grams of raw materials inventory is on hand at the start of the 1st Quarter and the beginning accounts payable for ne 1st Quarter is $8,400. ach unit requires 6 grams of raw material that costs $1.60 per gram. Management desires to end each quarter with an inventory of aw materials equal to 25% of the following quarter's production needs. The desired ending inventory for the 4th Quarter is 6,000 rams. Management plans to pay for 60% of raw material purchases in the quarter acquired and 40% in the following quarter. Each unit equires 0.20 direct labor-hours and direct laborers are paid $14.50 per hour.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 6PA: Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A...

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Gent Designs requires three units of part A for every unit of Al that it produces. Currently, part A is made by Gent, with these per-unit costs in a month when 4.000 units were produced: Variable manufacturing overhead is applied at $1.00 per unit. The other $0.30 of overhead consists of allocated fixed costs. Gent will need 6,000 units of part A for the next years production. Cory Corporation has offered to supply 6,000 units of part A at a price of $7.00 per unit. It Gent accepts the offer, all of the variable costs and $1,200 of the fixed costs will be avoided. Should Gent Designs accept the offer from Cory Corporation?
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