lodule 6 Textbook Problems i 5 Print Problem: Module 6 Textbook Problem 5 Learning Objective: 6-3 Make appropriate outsourcing decisions Saved Cost of materials (14,700 Units $21) Labor (14,700 Units $20) Depreciation on manufacturing equipment. Salary of supervisor of engine production Rental cost of equipment used to make engines Allocated portion of corporate-level facility-sustaining costs Total cost to make 14,700 engines Benson Company makes and sells lawn mowers for which it currently makes the engines. It has an opportunity to purchase the engines from a reliable manufacturer. The annual costs of making the engines are shown here. a. Maximum price per unit b. Maximum price per unit Help $ 308,700 294,000 42,000 70,000 12,000 85,000 $ 811,700 Save & Exit Submit Check my work "The equipment has a book value of $95,000 but its market value is zero. Required a. Determine the maximum price per unit that Benson would be willing to pay for the engines. b. Determine the maximum price per unit that Benson would be willing to pay for the engines, if production increased to 18,400 units. (For all requirements, Round your answers to 2 decimal places.)
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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